UZBEKISTAN: Fitch Ratings — local market growth forecasts appear ambitious considering the insurance sector's small size

30 June 2020 — Marina MAGNAVAL
Fitch Ratings international credit rating agency has published a report evaluating the insurance segment of Uzbekistan. The agency "believes that regulatory oversight in Uzbekistan is developing and has limited transparency and effectiveness of enforcement", the report said.

Fitch noted that Uzbekistan "has embarked on a substantial reform programme for the local insurance sector". This programme "is part of wider government reforms targeting improved stability and growth prospects, as well as addressing institutional and governance weaknesses in the national economy".

In August 2019, the government announced the reforms aimed to strengthen the role of insurance in the country's economy, to develop a new comprehensive regulatory framework, as well as to support premium growth in retail insurance. As the agency mentioned, the local government "expects the insurance sector's GDP contribution to grow to 0.8% by 2022 from 0.4% in 2018, and GWP to increase to USD 478 million from USD 203 million, respectively, as a result of the reforms".

Fitch Ratings "believes that the forecast growth rates appear ambitious". The agency underlined that the insurance sector is still a small part of the local financial market, "with an unsophisticated technical level of expertise and limited product diversity. Sector development has been constrained by the previously heavily state-controlled economy, weak regulatory framework, and low levels of household disposable income" the report said.

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