The creation of this entity corresponds to the objectives of the successful implementation of the socio-economic development of the country in 2012-2016, the development of the insurance market, and increase in investment capacity, ensuring the insurance protection of state interests, legal entities and individuals in the territory of Turkmenistan.
In this sense, last week, Turkmen President Gurbanguly BERDIMUHAMEDOV signed a decree allowing TURKMENGAS to be the main shareholder in authorized capital as a founder of the closed joint stock company INSURANCE SERVICES, informed Trend News Agency. According to the quoted source, "the Ministry of Economy and Development of Turkmenistan is instructed to ensure in the established procedure state registration of Insurance services closed joint stock company".
In late July, at the Government meeting, the President underlined that in the transition to a market economy, insurance segment is an important factor promoting economic and business activity, new areas of investment, helps preventing the diversion of substantial working capital to compensation and thus ensures the continuity of the production cycle: "Insurance also has high social value as an effective mechanism to protect individuals and businesses from the risks and is the source of domestic long-term investments in the country", said the President Gurbanguly BERDIMUHAMEDOV, quoted by www.trend.az.
According to XPRIMM INSURANCE REPORT, in 2011 the gross premium written in Turkmenistan was of EUR 45.7 million, 15% more as compared to a year before. By insurance classes, voluntary segment predominated and represented 95% of total, a hardly usual situation for CIS Region. Looking at the past results, one should notice that the insurance market increased six times in last five years. Responsible for the development of the insurance industry is "the only one" company that operates: TURKMEN GOSSTRAKH which can be translated into "State Insurance Organization of Turkmenistan".
State Insurance Organization of Turkmenistan has an extensive network in the country - more than 40 offices. At this stage, the organization is expanding partnerships with leading international insurance and reinsurance companies and insurance brokers. In this sense, a considerable part of the reinsurance is through the largest insurance brokers in London insurance market, such as MARSH Ltd, AON Ltd, COLEMONT Ltd, HSBC, WILLIS Ltd.
The insurance market was not always a monopoly. After the collapse of the Soviet Union in 1991, the insurance market was partially opened to competition, and both state and private companies were operating. In 2000, the government cancelled the licenses of all the private insurers operating in the market, and effectively re-nationalized the insurance industry in Turkmenistan, TURKMEN GOSSTRAKH which was taken into full state ownership in 1997, remaining the only one player. For some years, this reality resulted in blocking the industries' development. At the same time, market penetration declined because TURKMEN GOSSTRAKH does not have the entrepreneurial spirit that the private insurers had.
In recent years, insurance market has rebounded, growing exponentially, proving the "local appetite" for insurance.