Uzbekistan’s Economic Boom Fuels Rapid Yet Uneven Growth in Insurance Sector

Sitting in a lively Mexican restaurant in Tashkent, promising a spicy taco eating competition and DJs playing Latin, R&B and electro-house every Friday, seems a world away from what most people in the UK think of when I mention travelling to Uzbekistan. But, spurred by years of economic growth and a waterfall of international investment, this is the reality with tens of thousands of brand new Chinese electric cars thronging streets lined with coffee shops that could be straight from east London. And, of course, the high-speed railway network is enough to make HS2 blush (a low bar, admittedly).

Alongside the economic development, the insurance industry in Uzbekistan has been growing rapidly too. Total market premiums have grown more than threefold in five years, according to Axco’s data, rising from $220mn in 2020 to $772mn in 2024. In addition, the market also wrote about $110mn of overseas inwards reinsurance in 2024.  This remarkable growth, however, has been somewhat uneven.

Sitting down for tea with Feruz Juraev, head of leading life insurer Apex Life, the struggles for the life sector are plain to hear. Turbo-charged by generous tax breaks, the life market grew rapidly over a few years until those tax breaks were abruptly removed in 2023. The life insurance industry, whilst not quite dying, was in critical care. Multiple life insurers disappeared from the market, while for those remaining, overall gross premiums fell by 79% in 2023 and by a further 11% in 2024. Apex Life bucked the trend, however, and was the only life insurer to grow in 2024 – and by a not insubstantial 250%.

And despite the challenges, ample opportunities remain. The employee benefit market remains underdeveloped, with few employers offering, or employees expecting, much beyond the core salary. International companies in Uzbekistan more typically do offer such benefit packages; however, growing numbers have seen this slowly begin to bleed across the broader economy, albeit at the moment a drip, but one that offers the potential to become a substantial flow of new premiums for life insurers. 

Non-life premiums, on the other hand, have been growing consistently year-on-year, driven by strong growth in property income and comprehensive motor premiums (undoubtedly linked to the aforementioned fleet of new cars). On the other hand, a particular feature of the market is that almost a quarter of all non-life premiums come from the underwriting of banks’ credit portfolios, with banks keen on this arrangement to cover their loan book as it is cheaper than holding comparable capital reserves. Arguably, though, this has led to a reduced focus on stringent lending, since it is the insurer, rather than the bank, that carries the risk of default.

Even during the recent boom years of strong economic growth, loss ratios for this business have been elevated, leaving the market potentially highly vulnerable to a recessionary environment. In Kazakhstan, a significant number of insurers writing similarly large volumes of bank credit business failed in the early 1990s following a banking crisis, and insurers there now largely avoid it. It remains to be seen if a similar trajectory will unfold in Uzbekistan, but they do say that while history does not repeat, it does tend to rhyme.

Growing Pains: Uzbekistan’s New State Reinsurer Faces Industry Concerns

The story on everyone's lips, however, is not about market performance but rather the recent, and somewhat abrupt, establishment of the O'Zbekiston Qayta Sug'urta Kompaniyasi – the Uzbekistan Reinsurance Company (URC). Formally announced for the first time only in May 2025, since 1 September 2025, URC has had first refusal rights on the entirety of all international reinsurance placements.

Whilst all change comes with a bump, this was more of a smack to a market that in 2024 placed $188mn with foreign reinsurers and received about $110mn in return. Of course, the creation of a national reinsurer is by no means unique to Uzbekistan and, in principle, will be beneficial to the local insurance sector, providing increased capacity and expertise for local reinsurance placements while reducing money flowing abroad.

The local market, however, remains concerned. At the moment, these could simply be teething issues that will resolve in due course, or they could become long-term structural challenges. Still, the industry remains hopeful of working constructively with the government to achieve the optimal outcome for all interests.

According to the Chairman of the Insurance Association, Oybek Khalilov, some of the largest concerns centre on the URC’s extensive remit. Essentially, all international reinsurance must first be offered to the URC on the same terms as those offered by foreign reinsurers. In practice, this means obtaining terms from overseas and then offering the business to the URC on those terms. In at least one case, the URC has then fully taken the placement, leaving the quoting reinsurers with nothing. This gives URC a fairly unprecedented monopoly position in the market.

Further, the URC has a capital of only about $25mn with no full state guarantee, which sits uneasily with the liabilities it can accept. In contrast, it has no international credit rating and no experience in writing business, so it is now able to take 100%. Indeed, while the requirement applies to life reinsurance, the URC has yet to even establish a life department internally, with only a small non-life team in place.  

Perhaps the biggest issue is the uncertainty as to whether, or to what extent, the URC will accept business. Uncertainty that has the potential to disrupt relationships that have been carefully developed on the terraces of Monte Carlo, in the halls of Baden-Baden and through the years as reliable partners. And ultimately, such disruptions could also impact the international inwards reinsurance business that local insurers have painstakingly developed over the past decade.

It remains very early in the establishment of the URC, and it undoubtedly could be pivotal in the development of the local market. But it would, arguably, be sensible to proceed more cautiously within defined boundaries, for example, a set mandatory cession in place of first refusal on all international business. This would give the market far greater certainty in arranging placements and maintaining relationships, and provide the URC with time to develop the expertise and capital it needs to play a central role in the market.