Fitch notes growth in Uzbekistan's insurance sector

Fitch notes strengthening of Uzbekistan's insurance sector

Tashkent, Uzbekistan (UzDaily.uz) —

According to a new report from Fitch Ratings, the fundamental creditworthiness of Uzbekistan's insurance sector is supported by an improved operating environment, tighter prudential requirements, and stable growth in insurance premiums.

The agency emphasizes the improving macroeconomic situation in the country, which is contributing to the increased resilience of local financial institutions, including insurance companies.

In mid-2025, Fitch revised its outlook on the operating environment for Uzbekistan's insurance sector to Positive, following the country's sovereign rating upgrade to 'BB' in June 2025. In June 2026, the outlook on Uzbekistan's sovereign rating was also revised from Stable to Positive.

Insurance companies benefit from improved asset credit quality, increased minimum capital adequacy requirements, and improved provisioning and risk management practices.

Fitch identified the implementation of IFRS 17 and improved public disclosure as additional factors enhancing transparency. However, by most of these indicators, the Uzbek insurance sector still lags behind more developed markets, including Western European countries.

The non-life insurance segment remains the main growth driver. In 2025, gross premiums written in this segment increased by 36%, accounting for approximately 96% of total premiums. In the first quarter of 2026, gross premiums grew by a further 54% compared to the same period in 2025.

The life insurance segment remains small, but has begun to recover from the sharp decline following the abolition of tax incentives.

Insurance company capitalization is also gradually improving. Insurers have been increasing capital to meet the increased minimum requirements introduced in October 2025. At the same time, many companies continue to operate with limited capital above the minimum regulatory requirements.

Regulatory reforms are also having a positive impact on the compulsory motor third-party liability insurance segment. Increases in rates and coverage limits, which came into effect in January 2026, as well as large-scale digitalization of insurance contract administration, contributed to premium growth and improved underwriting results in the first quarter of 2026.

Fitch maintains its risk assessment for the sector as high. The structure of insurance companies' businesses is exposed to risks associated with financial risk insurance, which creates increased underwriting risks, especially in stress scenarios.

The incoming reinsurance segment also remains a source of potential volatility. Furthermore, the increasing share of real estate in insurance companies' investment portfolios may lead to increased liquidity risk.