Tashkent, Uzbekistan (UzDaily.com) — Uzbekistan’s National Agency for Prospective Projects (NAPP) has announced plans to raise tariffs and insured amounts for compulsory motor third-party liability (MTPL) insurance starting from 1 January 2026. According to international credit rating agency Moody’s Ratings, this measure will strengthen the financial resilience of the insurance sector and represents a credit positive for Uzbek insurers.

According to NAPP, the new tariffs have been calculated using actuarial models and reflect current market conditions. As part of the reform, the insured amount under MTPL policies will double — from 40 million to 80 million soums.

Moody’s Ratings expects the base insurance premiums to rise by 3.5 to 4 times. This is the first revision of MTPL tariffs and coverage limits since the introduction of compulsory motor insurance in the country in 2019. Current tariffs remain among the lowest in the world and do not cover insurers’ actual loss exposures.

As a socially significant product, MTPL is subject to strict state regulation: both premiums and payout amounts are set at levels that significantly constrain insurers’ commercial flexibility.

Since the introduction of the current base premium — 56,000 soums (approximately $4.40) — more than five years have passed. During this period, inflation and currency fluctuations have driven up vehicle prices and repair costs, while the number of insured events has also increased amid rapid motorization in the country.

Moody’s notes that MTPL accounted for less than 5% of total non-life premiums in Uzbekistan in 2023–2024, highlighting the product’s underdevelopment relative to overall market growth.

The current tariff structure does not allow insurers to cover claims expenses. As a result, MTPL loss ratios exceed 100%, with significantly higher figures in Tashkent, pointing to a serious structural imbalance. Despite persistent losses, insurers are required by law to continue offering MTPL policies.

In response, some insurers have tried to reduce losses by shifting operations to regions with lower claim frequencies, while others bundle MTPL with additional services or enhanced coverage to balance profitability.

Nevertheless, the overall unprofitability of MTPL limits incentives for its active promotion, hampers premium growth, and distorts competition in the market. Consequently, consumers face poor service quality, including delayed payouts and partial compensation. Moody’s stresses that the upcoming tariff increase will enable insurers to reduce losses and lay the groundwork for the sustainable development of the MTPL segment in 2026 and beyond.