September 9, 10:40UzDaily

Uzbekistan's New National Reinsurance Company Completes First Year of Operation with Positive Results

A little over a year ago, Uzbekistan began addressing a long-standing issue in its financial system: the lack of a specialized national institution capable of assisting insurers in managing large and complex risks. This situation changed following the signing of Presidential Decree No. PP-191 on May 23, 2025, which provided for the creation of JSC 'Reinsurance Company of Uzbekistan'—the country's first national reinsurance organization. After one year, the results warrant close examination, as they speak not only to the company itself but also to the direction of development of the Uzbek insurance market.

The Significance of Reinsurance

Essentially, reinsurance is insurance for insurers. When a company accepts a policy with a large or unusually high risk—such as a major industrial facility, a bridge, or an aircraft fleet—it usually does not wish to bear the entire risk alone. Part of this risk is transferred to a reinsurer, which frees up capital and protects the company from potentially serious losses. At a global level, this often underestimated mechanism supports the stability of insurance markets, promotes international risk diversification, and provides large investment projects with the necessary financial potential for implementation.

Countries that develop strong domestic reinsurance capacity gain several advantages: reduced dependence on foreign reinsurance markets, increased resilience of the insurance sector, and a greater ability to support large domestic risks. Industry researchers have advocated for this position for decades. Scholars such as Emmett J. Vaughan and Theresa M. Vaughan described reinsurance as an important tool for managing financial risks, especially because it reduces the burden on the insurer's own capital. Others, including George Ridge and Michael McNamara, emphasized the broader role of reinsurance in absorbing large losses, supporting competition in insurance markets, and allowing insurers to introduce new products without holding all risks on their balance sheets.

David Cummins, whose research is frequently cited in this field, studied the relationship between reinsurance markets and overall financial stability. Reinsurance companies play a vital role in managing catastrophic risks, and their effectiveness increasingly depends on the ability to effectively utilize technology and data. This link between digitalization and reinsurance efficiency is reflected in recent industry studies. Annual reports from Swiss Re Institute Sigma highlight artificial intelligence, big data, and other new technologies as forces transforming risk assessment and the value chain in insurance, while growing catastrophic risks place higher demands on risk modeling and capital. Munich Re reports similarly emphasize the increasing importance of climate risk assessment and ESG principles in the insurance and reinsurance industry.

International organizations have reached similar policy conclusions. The International Association of Insurance Supervisors emphasizes the importance of effective risk assessment, transparency, and reliable risk transfer mechanisms in well-functioning insurance markets. The OECD also recognizes insurance and reinsurance as important mechanisms for risk diversification and efficient capital allocation across markets. Financial sector development studies have also highlighted the importance of strengthening domestic financial institutions and the capacity to bear risks in emerging markets.

This broader international experience provides important context for reforms in Uzbekistan. The establishment of a national reinsurance institute under Presidential Decree No. PP-191 reflects the government's goal of strengthening internal risk-bearing capacity, supporting the development of the insurance market, and creating a stronger link between Uzbekistan's growing economy and international reinsurance markets.

What Has Changed in the First Year

The most noticeable change has been digitalization. Before the reform, reinsurance processes in Uzbekistan were largely fragmented and required a large amount of paper documentation, with contracts being concluded and signed through numerous manual channels, and there was no single centralized platform for managing proposals and related data. The national reinsurance organization helped shift the market towards a unified electronic approach.

Differences are evident in all aspects: document processing has moved from paper procedures to a fully electronic system; proposals and applications can now be submitted and reviewed online instead of being processed exclusively manually; data is stored in a centralized database instead of being scattered across individual records; reporting is becoming increasingly automated rather than being compiled manually. According to the company's internal assessment, transparency has improved from 'moderate' to 'high.'

The platform does more than just speed up paperwork. By bringing reinsurance proposals into a common electronic environment, it creates a more consistent process for market participants and enhances the traceability of decisions and transactions. This can help reduce opportunities for informal influence, as well as increase accountability and transparency. Furthermore, it reduces the likelihood of routine human errors: fewer figures are entered manually, fewer documents are moved between departments, and regulators and auditors can follow a clearer audit trail.

For a market that previously operated without a centralized digital framework, this is more than a cosmetic update. It has the potential to change the speed at which local insurers can place large risks, how effectively international reinsurers can assess presented opportunities, and how effectively regulators can monitor aggregate market risks and identify emerging threats.

Establishing International Ties

The national reinsurer is only effective if it can provide opportunities for large and complex risks, which requires strong relationships with international markets. During the first year, the company established partnerships with reinsurers in Europe and Asia, as well as with insurance companies in CIS countries. It also established cooperation with international reinsurance brokers, promoting expanded access to global markets, strengthening underwriting practices, and providing Uzbek specialists with opportunities for international training and knowledge exchange. Several international seminars and training initiatives were organized during the year to strengthen internal expertise—a recognition that technology alone is insufficient to ensure the competitiveness of the reinsurance market; qualified specialists are equally important.

According to company data, the achieved result is tangible: increased capacity to place large risks internationally, enhanced risk transfer capabilities for the domestic insurance market, and reduced dependence on international markets, where domestic capacity can now develop. The company has also begun creating conditions for a larger share of reinsurance business to remain within the country, giving local insurers more room to take on larger and more complex risks with the support of the specialized national reinsurance institute.

An Honest Look at Strengths and Gaps

The company does not present its first year as a flawless journey. A SWOT analysis highlights both achieved progress and remaining challenges. Among the positive points are strong state support, fully digitized processes, an operational unified platform, and the creation of a specialized national reinsurance institute. On the other hand, the company still lacks an international financial stability rating, there is a shortage of specialists with specialized reinsurance expertise, the internal scientific and analytical base remains limited, and since the ability of local insurers to retain risks depends on regulatory restrictions, some of the largest and most complex risks still need to be placed in international markets.

The outlook for the future presents significant opportunities. Uzbekistan can position itself as a reinsurance hub for Central Asia, achieve an international financial stability rating, expand the use of ESG principles and digital technologies, and apply AI and big data tools to strengthen underwriting and risk assessment. At the same time, the company faces risks common to the global reinsurance industry—natural disasters, global economic shocks, currency volatility, and increased competition from established international players with decades of accumulated capital, technical expertise, and rating agency track records. These opportunities naturally require time for the new organization to build.

Figures for the First Half

Financial statements for the first half of 2026 provide an early indication of the company's current standing.

Total Assets

Reached 131.6 billion sums against total liabilities of the same amount—a balanced position built on authorized capital of 80 billion sums and long-term investments of 88.7 billion sums. Current assets amounted to 42.3 billion sums. Equity reached 87.5 billion sums, with retained earnings amounting to 7.4 billion sums—a solid start for a company in its first operating year. On the liability side, insurance reserves totaled 12.9 billion sums, of which 8.1 billion sums were ceded to reinsurers, leaving net insurance reserves of 4.7 billion sums. Current liabilities amounted to 39.4 billion sums.

Overall, these figures indicate that the company entered its first full year of operation with real capital, not just paper obligations. The fact that the share of reinsurers in total reserves already exceeds 8 billion sums in just two quarters suggests that the company is actively placing risks internationally, rather than simply accumulating capital while finding its footing.

What's Next

The company's agenda for the coming years focuses on transforming a promising first year into a sustainable market infrastructure. At the top of the list is securing an international financial stability rating, which will increase confidence in the organization among domestic and international partners and strengthen its position when dealing with global reinsurers. Alongside this, the company plans to gradually implement artificial intelligence, big data, and machine learning in its reinsurance operations, and to explore new risk transfer instruments, including catastrophe bonds, to finance protection against large-scale natural disasters. Such instruments are becoming increasingly relevant in markets prone to earthquakes, floods, and other extreme events.

Ambitions also extend beyond the domestic market. The company aims to strengthen reinsurance cooperation with Central Asian countries and position Uzbekistan as a regional reinsurance center. Achieving this goal will require investing in people as much as in technology—including a stronger flow of internationally recognized qualified specialists and possibly a specialized underwriting academy or professional training center to develop expertise domestically, rather than relying predominantly on foreign training. Another priority is developing a unified digital analytics database with real-time monitoring capabilities. Such a system will allow the company and regulators to more effectively track aggregate market risks and identify emerging risk concentrations at an earlier stage, instead of relying mainly on retrospective analysis. Simultaneously, the company intends to more deeply integrate ESG principles into its activities and the broader development of the reinsurance market. This is increasingly becoming not just a matter of compliance: ESG practices can influence how international reinsurers assess counterparties, manage risks, and structure deals.

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podrobno.uzSeptember 1, 09:58

Uzbekistan's Path to Independence: A Chronology of Changes Over 35 Years

Uzbekistan began its journey as an independent state in 1991. Over the subsequent thirty-five years, the country underwent significant transformations, including decision-making, implementation of reforms, construction of facilities, execution of economic experiments, and the maturation of entire generations of citizens.

The capital, Tashkent, has changed: from a city with Soviet architecture and a familiar way of life, it has transformed into a modern metropolis with high-rise buildings, new residential quarters, a metro system, and intense traffic. The economic system evolved from the Soviet legacy to the gradual attraction of private business and investment. The country's foreign relations also transformed.

Between 1991 and the present day, new roads, factories, universities, airports, and high-speed railway lines have appeared, which have fundamentally affected the daily lives of the population. Today, Uzbekistan is a completely different state, and a special program highlighting the historical path and reforms of recent decades is planned for its anniversary in 2026.

To fully grasp the current appearance of Uzbekistan, it is necessary to trace its development since 1991: from the first days of sovereignty to the establishment of its own state; from conservative economic policy to industrialization; from closed borders to gradual opening; from the use of early mobile phones to the digitalization of life; and from local politics to participation in international summits in Samarkand.

Chronology of the Formation of Independent Uzbekistan

On August 31, 1991, the state independence of the Republic of Uzbekistan was proclaimed at the extraordinary VI session of the Supreme Soviet in Tashkent. In November of the same year, the State Flag appeared, becoming one of the key symbols of the new state. However, the political declaration was only the beginning; the country faced the complex task of creating its own army, financial system, foreign policy, and state institutions.

A referendum on independence and the first presidential elections were held on December 29, resulting in Islam Karimov being elected as the first president. In 1992, independence was legally formalized: Uzbekistan joined the UN on March 2, and the first foreign diplomatic mission, including the US embassy, opened in Tashkent. An important domestic event was the adoption of the Constitution of the Republic of Uzbekistan on December 8 of that year. Furthermore, the country began forming its armed forces, transferring military units and facilities of the former Soviet army under Uzbek control.

In 1993, Uzbekistan focused on creating national infrastructure. One notable process was the phased introduction of the Uzbek Latin alphabet, symbolizing a cultural and political break from the Soviet past. Simultaneously, new administrative and financial structures developed, and international ties were strengthened. Nevertheless, the economy remained heavily dependent on the Soviet production heritage, requiring adaptation to the conditions of a new sovereign state.

On July 1, 1994, the Uzbek sum was introduced, replacing the previously used Soviet and temporary coupon money, marking economic self-sufficiency. In December of the same year, the first elections to the new parliament—the Oliy Majlis—were held.

In the mid-1990s, Uzbekistan maintained a cautious approach to economic reforms, avoiding immediate and large-scale privatization, unlike several other post-Soviet republics. In 1995, the joint venture 'Zarafshan-Newmont' operated in Muruntau, serving as an example of attracting foreign capital into gold mining. In March 1995, a referendum was held to extend Islam Karimov's term.

In 1996, the country began reevaluating its own history. The 660th anniversary of Amir Timur was widely celebrated, and the State Museum of Timurid History opened in Tashkent, making the central part of the city a space for a new national historical narrative, contrasting with Soviet historiography. The capital also changed: Soviet symbols gave way to new monuments and names. Additionally, on July 19, 1996, the first automobile factory in Central Asia opened in Asaka, Andijan region, allowing the republic to join the group of 28 auto-producing countries.

In 1997, Bukhara and Khiva celebrated their 2500th anniversaries, turning the historic cities into an important part of Uzbekistan's international image. Samarkand, Bukhara, Khiva, and Shahrisabz began to be perceived as independent cultural centers. The economy remained largely state-controlled, and citizens' contacts with the outside world were limited.

1998 was a period of global economic turbulence caused by the Asian financial crisis. In the cultural sphere, the country continued work on its national heritage with UNESCO's support, which commemorated the anniversaries of thinkers such as Ahmad al-Fargani and Imam al-Bukhari.

On February 16, 1999, a series of explosions occurred in Tashkent, officially classified as an assassination attempt on President Islam Karimov. Uzbekistan faced a new regional reality where security became a priority due to the civil war in Tajikistan, the rise of radical groups, and instability in Afghanistan. At the same time, the industrial base was actively developing: SamKochavto began operating commercially, and cooperation with South Korea became an important vector for industrialization.

In 2000, one of the landmark infrastructure achievements was the opening of tunnels on the Kamchik and Rezak passes on the Tashkent—Osh road, which significantly improved communication between the Fergana Valley and the rest of the country. The memorial complex 'Shahidlar Xotirasi' dedicated to the victims of repression was also opened in Tashkent.

On June 15, 2001, Uzbekistan became one of the founders of the Shanghai Cooperation Organisation in Shanghai, alongside China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan. Production of the Daewoo Matiz began at the factory in Asaka, Andijan region, and the Yunusabad metro line started operating in Tashkent.

In October 2002, UN Secretary-General Kofi Annan visited Uzbekistan, which was a notable international event and highlighted the country's significance in Central Asia. Major anniversary events were held in Termez and Shahrisabz, cementing history as a tool for shaping national identity.

2003 was declared the Year of the Mahalla, when the mahalla became an important element of social policy through which the state interacted with families and resolved local issues. The economic model remained largely closed, and international investments were attracted selectively, while maintaining strong state involvement in key sectors.

2004 was remembered for sporting successes: Uzbekistan won several Olympic medals in Athens, and Alexander Dokturishvili and Artur Taymazov became Olympic champions. Rustam Kasymdzhanov won the FIDE World Chess Championship. However, in March of the same year, a series of terrorist acts occurred in Tashkent and Bukhara.

On May 13, 2005, mass protests erupted in Andijan, which ended with the use of force and the death of a large number of people, the exact number of victims of which is still disputed. These events triggered international investigations, criticism from authorities, the imposition of sanctions, and a deterioration of relations with the United States and the European Union.

In 2006, Uzbekistan joined the Eurasian Economic Community, and the Kungrad salt plant was launched in Karakalpakstan. The economy was based on heavy industry oriented towards domestic production, raw material extraction, energy, chemistry, and automotive manufacturing.

The Toshguzar—Baisun—Kumkurgan railway line, opened in 2007, became an important infrastructure project connecting the southern regions of the country and holding strategic importance. That same year, Tashkent was granted the status of the capital of Islamic culture. Samarkand celebrated its 2750th anniversary, and Margilan its 2000th, demonstrating how independent Uzbekistan combines modern state structure with rich ancient heritage.

The global financial crisis of 2008 was a serious test that Uzbekistan attempted to mitigate through state control over finances and the implementation of large industrial and infrastructure projects. During this period, the joint venture General Motors Powertrain Uzbekistan was established to produce car engines, and the 'Navoi' Free Economic Industrial Zone was founded in the Navoi region.