Uzbekistan's New National Reinsurer Marks a Strong First Year

Tashkent, Uzbekistan (UzDaily.uz) — A little over a year ago, Uzbekistan set out to address a longstanding gap in its financial system: the country had no dedicated national institution to help insurers manage large and complex risks. That changed with Presidential Resolution No. PP-191, signed on May 23, 2025, which provided for the establishment of "Reinsurance Company of Uzbekistan" JSC — the country's first National Reinsurance Organization. One year on, the results are worth a closer look — not just for what they say about the company itself, but for what they signal about the direction of Uzbekistan's insurance market.

Why reinsurance matters

Reinsurance is, in essence, insurance for insurers. When a company underwrites a large or unusually risky policy — a major industrial facility, a bridge, or a fleet of aircraft — it typically does not want to carry the entire exposure on its own. It transfers part of the risk to a reinsurer, freeing up capital and protecting itself against potentially severe losses. Globally, this often-overlooked mechanism supports the stability of insurance markets, facilitates the international diversification of risk, and provides large investment projects with the financial capacity needed to move forward.

Countries that build strong domestic reinsurance capacity can benefit in several ways: less reliance on foreign reinsurance markets, a more resilient insurance sector, and greater capacity to support large domestic risks. Industry researchers have made this case for decades. Scholars such as Emmett J. Vaughan and Therese M. Vaughan have described reinsurance as an important tool for managing financial risk, particularly because it reduces pressure on an insurer's own capital. Others, including George E. Rejda and Michael McNamara, have highlighted the broader role of reinsurance in absorbing large losses, supporting competition in insurance markets, and enabling insurers to introduce new products without having to retain every risk on their own balance sheets.

David Cummins, whose research is frequently cited in this field, has examined the relationship between reinsurance markets and broader financial stability. Reinsurance companies play an important role in managing catastrophic risks, while their effectiveness increasingly depends on their ability to use technology and data effectively. That link between digitalization and reinsurance performance is also reflected in recent industry research. The Swiss Re Institute's annual Sigma reports highlight artificial intelligence, Big Data, and other emerging technologies as forces reshaping risk assessment and the insurance value chain, while growing catastrophe exposures are placing greater demands on risk modelling and capital. Munich Re's reporting similarly emphasizes the growing importance of climate-risk assessment and ESG considerations in the insurance and reinsurance industry.

International organizations have reached similar conclusions from a policy perspective. The International Association of Insurance Supervisors emphasizes the importance of effective risk assessment, transparency, and sound risk-transfer arrangements in well-functioning insurance markets. The OECD likewise recognizes insurance and reinsurance as important mechanisms for risk diversification and the efficient allocation of capital across markets. Research on financial-sector development has also highlighted the importance of strengthening domestic financial institutions and risk-bearing capacity in emerging markets.

This broader international experience provides an important context for Uzbekistan's reform. The establishment of a national reinsurance institution under Presidential Resolution No. PP-191 reflects the government's objective of strengthening domestic 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 changed in year one

The most visible shift has been digital. Before the reform, reinsurance processes in Uzbekistan were largely fragmented and document-heavy, with contracts negotiated and signed through multiple manual channels and no single centralized platform for managing offers and related data. The National Reinsurance Organization has helped move the market toward a unified electronic approach.

The difference shows up across the board:

• Document handling has moved from paper-based processes to a fully electronic system.
• Offers and proposals can now be submitted and reviewed online rather than being handled entirely through manual processes.
• Data is maintained in a centralized database instead of being dispersed across separate records.
• Reporting is increasingly automated rather than compiled manually.
• Transparency, according to the company's internal assessment, has improved from "moderate" to "high."

The platform does more than speed up paperwork. By bringing reinsurance offers into a common electronic environment, it creates a more consistent process for market participants and strengthens the traceability of decisions and transactions. This can help reduce opportunities for informal influence while also improving accountability and transparency. It also reduces the scope for routine human error: fewer manually re-entered figures, fewer documents moving between departments, and a clearer audit trail that regulators and auditors can follow.

For a market that previously operated without a centralized digital backbone, this is more than a cosmetic upgrade. It has the potential to change how quickly domestic insurers can place large risks, how efficiently international reinsurers can assess the opportunities presented to them, and how effectively regulators can monitor market-wide exposures and identify emerging risks.

Building bridges abroad

A national reinsurer is only effective if it can provide capacity for large and complex risks — and that requires strong relationships with international markets. In its first year, the company developed partnerships with reinsurers across Europe and Asia, as well as with insurance companies in the CIS. It also established cooperation with international reinsurance brokers, helping expand access to global markets, strengthen underwriting practices, and provide Uzbek specialists with opportunities for international training and knowledge sharing. Several international seminars and training initiatives were organized during the year to strengthen in-house expertise — an acknowledgment that technology alone cannot make a reinsurance market competitive; skilled professionals are equally essential.

The payoff, according to the company, has been tangible: greater capacity to place large risks internationally, stronger risk-transfer capabilities for the domestic insurance market, and reduced dependence on international markets where domestic capacity can now be developed. The company has also begun creating conditions for a greater share of reinsurance business to be retained within the domestic market, while giving local insurers more room to underwrite larger and more complex risks with the support of a dedicated national reinsurance institution.

A candid look at strengths and gaps

The company does not present its first year as a flawless journey. A SWOT-style assessment highlights both the progress made and the challenges that remain.

On the plus side are strong government support, fully digitalized processes, an operational unified platform, and the establishment of a dedicated national reinsurance institution. On the other side of the ledger, the company does not yet have an international financial strength rating, there is a shortage of specialists with dedicated reinsurance expertise, in-house research and analytical capacity remains limited, and — because domestic insurers' risk-retention capacity is subject to regulatory limits — some of the largest and most complex exposures still need to be placed in international markets.

Looking ahead, the opportunities are sizeable. Uzbekistan could position itself as a reinsurance hub for Central Asia, pursue an international financial strength rating, expand its use of ESG principles and digital technologies, and adopt AI and Big Data tools to strengthen underwriting and risk assessment. At the same time, the company faces the risks common to the global reinsurance industry — natural catastrophes, global economic shocks, currency volatility, and intensifying competition from established international players with decades of accumulated capital, technical expertise, and rating-agency track records. These are capabilities that a newly established institution will naturally need time to build.

The numbers, six months in

Financial statements for the first half of 2026 give an early read on where the company stands. Total assets reached 131.6 billion soums, against total liabilities of the same amount — a balanced position built on 80 billion soums in authorized capital and 88.7 billion soums in long-term investments. Current assets stood at 42.3 billion soums.

Equity capital came to 87.5 billion soums, with retained earnings of 7.4 billion soums — a solid start for a company still in its first operating year. On the liabilities side, insurance reserves totaled 12.9 billion soums, of which 8.1 billion soums was ceded to reinsurers, leaving net insurance reserves of 4.7 billion soums. Current liabilities amounted to 39.4 billion soums.

Taken together, the figures point to a company that entered its first full year of operations with real capital behind it, rather than running on paper commitments alone. The fact that reinsurers' share of total reserves already sits above 8 billion soums after just two quarters suggests the company is actively placing risk internationally, not simply accumulating capital while it finds its footing.

What comes next

The company's agenda for the coming years is focused on turning a promising first year into lasting market infrastructure. Near the top of the list is securing an international financial strength rating, which would enhance the organization's credibility with domestic and international partners and strengthen its position when working with global reinsurers.

Alongside this, the company plans to gradually introduce artificial intelligence, Big Data, and machine learning into its reinsurance operations, while exploring new risk-transfer instruments, including catastrophe bonds, to help finance protection against large-scale natural disasters. Such instruments are increasingly relevant in markets exposed to earthquakes, floods, and other extreme events.

The ambition also extends beyond the domestic market. The company aims to strengthen reinsurance cooperation with Central Asian countries and position Uzbekistan as a regional hub for reinsurance. Achieving this will require investment in people as much as in technology — including a stronger pipeline of specialists with internationally recognized qualifications and potentially a dedicated underwriting academy or professional training center to develop expertise domestically rather than relying primarily on training abroad.

Another priority is the development of a unified digital analytics database with real-time monitoring capabilities. Such a system could enable the company and regulators to monitor market-wide exposures more effectively and identify emerging concentrations of risk at an earlier stage, rather than relying primarily on retrospective analysis.

At the same time, the company intends to integrate ESG principles more deeply into its operations and the wider development of the reinsurance market. This is increasingly becoming more than a compliance consideration: ESG practices can influence how international reinsurers assess counterparties, manage risks, and structure long-term cooperation.

Additional recommendations arising from the company's first-year review include strengthening protection through obligatory reinsurance programs and continuing to expand relationships with international reinsurers and brokers beyond the initial network of European, Asian, and CIS partners. Together, these measures are intended to strengthen the company's technical capacity, broaden its international connectivity, and lay the foundations for a more resilient and internationally integrated reinsurance market in Uzbekistan.

The bigger picture

None of this happens in a vacuum. Globally, reinsurers are facing many of the same pressures that Uzbekistan's new national organization will eventually have to navigate: rising natural catastrophe exposures, geopolitical uncertainty, and a technological shift that increasingly rewards insurers and reinsurers able to price and manage risk using better data, more sophisticated models, and faster tools. Institutions such as Swiss Re and Munich Re have been tracking these trends for years, and their experience offers Uzbekistan a useful, if sobering, lesson about what building durable reinsurance capacity requires. It is not a one-year project, but a sustained effort to build capital, expertise, technology, and international trust over time.

Domestic economists have been making a parallel case for strengthening Uzbekistan's insurance market. Researchers such as A. Vakhobov, Sh. Abdullaev, and B. Berdiyarov have examined the development of reinsurance relations and the financial stability of insurance companies — areas that, until the adoption of Presidential Resolution No. PP-191, lacked a dedicated national institution to translate such objectives into practice. The establishment of the National Reinsurance Organization provides an institutional framework through which these long-standing priorities can be pursued.

For now, however, the numbers and the reforms point in the same direction. A market that previously relied heavily on paper-based contracts and manual processes is increasingly moving toward a unified digital platform. A country that has historically depended significantly on international reinsurance capacity for large and complex risks now has a domestic institution specifically designed to strengthen local risk-bearing capacity and facilitate access to international markets.

Whether the National Reinsurance Organization ultimately becomes the regional hub its founders envision will depend on execution over the coming years — securing an international financial strength rating, developing a strong pool of qualified specialists, strengthening analytical and technological capabilities, and demonstrating to global partners that a newly established institution can be a reliable long-term counterparty for major risks.

But judged on its first year alone, the direction is clear: the foundations have been laid, and Uzbekistan now has an institutional platform from which to build a stronger, more resilient, and more internationally connected reinsurance market.

By Anvarjon Gafforov,
General Director of "Reinsurance Company of Uzbekistan" JSC — National Reinsurance Organization