Uzbekistan's insurance sector has recorded growth of 2.5 times in market
capitalization over the past five years to reach 240 billion Uzbekistan
Som (USD 120 million) in 2011.
Following specific measures taken by officials in the country to diversify and make structural changes to the economy, the share of banking, financial, insurance and leasing, communications/IT and others in the country's GDP increased from 38.7% in 2005 to 50.5% in 2011 and to 52.2% by the first half of 2012, according to the program for developing services in the Republic of Uzbekistan for 2012-2016.
In 1H2012, insurance companies of Uzbekistan increased premiums by 13.4% compared to the total in June 2011, up to UZS 137.8 billion (EUR 57.8 million), according to the market data provided by Information-Rating Agency SAIPRO. Voluntary insurance accounted for 68% of total underwritings, while almost 60% of GWP was reported in Tashkent, the capital of Uzbekistan. The total amount of insurance payments rose by 75% to UZS 24.5 billion (EUR 10.3 million).
Uzbekistan recorded in 2011 the second best economic growth rate in the Commonwealth of Independent States according to the UN report World Economic Situation and Prospects 2011 (WESP). In line with the forecast of the UN experts, the real gross domestic product (GDP) increased by 7.3% in 2011 (partially estimated), while, in 2012 Uzbekistan's economy is expected to rise by 7%.
Chief of the State Insurance Supervision of the Ministry of Finance of the Republic of Uzbekistan, Olimjon IKROMOV has shared with participants of the 5th International Investment Finance Forum (TIIFF) the outcomes of Uzbekistan insurance market reforms and its development prospects. The event was organized by SAIPRO Information-rating agency and supported by PRIMM Insurance & Pensions Magazine as Media Partner.
Uzbek insurers recorded an increase of 42.1% in the first half of this year compared to the same period in 2010, totaling EUR 50.8 million in gross written premiums, said Olimzhon IKRAMOV, Director of the Insurance Supervisory Authority of Uzbekistan. Of these, a share of 40% corresponds to state owned companies, a percentage that has been constantly decreasing over the last 7 years.
In 2010, the assets of the insurers of the republic were 412.5 billion soums, which is a 9.3% increase over the previous year. The growth of the insurers' assets was mainly achieved through growth of insurance reserves. The total amount of insurance reserves established by insurers of the republic was 136.2 billion soums, which is 53.6% more than the total amount of insurance reserves formed in 2009.
As competition in the insurance market increases, so should the amount of investment income in the profit of the insurance company. World practice shows that more than 70% of the income of insurance companies is just revenue from the investment. In Uzbekistan, so far insurance provide a significant proportion of income for many insurers.As of January 1, 2011 invested funds of insurers amounted to more than 300.3 billion soums, and in comparison with 2009 increased by 11.1%. Over the past 5 years the invested funds of insurers increased by more than 1.6 times with the average annual growth of investment of 11.1-15.7%.
In accordance with legislative changes regarding the amendment of the
requirements related to the minimum level of share capital of insurers,
within three years, starting July 1st, 2012 and until July 1st, 2014,
insurance companies in Uzbekistan must increase their share capital as
• for general insurance activity - to EUR 1.125 million,
• for life insurance activity - to EUR 1.5 million,
• for mandatory insurance activity - to EUR 2.25 million,
• for exclusive reinsurance activity - to EUR 5 million.
The insurance companies of Uzbekistan have underwritten, in 2010,
premiums of over SUMM 175 billion (EUR 72.7 million) worth, up 20% from
2009. "This growth comes under the circumstances of the national
economy's overall evolution and of the great potential the local market
has", said Olimjon IKRAMOV, Chief of the Insurance Supervision
Inspectorate, in the opening of the International Insurance Forum in
The Uzbekistani insurance market registered underwritings growth of 35%
for the first semester of this year, adding up to approximately EUR 38.8
million, and it is considered as one of the most dynamic markets in the
CIS territory. Thus, "Uzbekistan has been one of the last countries to
be affected by the crisis and this has given an impulse to the insurance
market", as stated by Dilshod SULTANOV, Director of Analysis and
Rating, SAIPRO Uzbekistan, during an exclusive interview for XPRIMM TV
at the Yalta International Forum.