Uzbekistan's new national reinsurer successfully completes its first year of operation

**Uzbekistan's New National Reinsurer Successfully Completes Its First Year of Operation**

Just over a year ago, Uzbekistan set out to address a long-standing issue in its financial system: the country lacked a specialized national institution to help insurers manage large and complex risks. The change came with the adoption of Presidential Resolution No. PP-191 dated May 23, 2025, which provided for the establishment of JSC "Reinsurance Company of Uzbekistan" — the country's first National Reinsurance Organisation. A year later, the results deserve a closer look — not only as an outcome of the company's own development, but also as an indicator of the direction in which Uzbekistan's insurance market is moving.

### Why Reinsurance Matters

At its core, reinsurance is insurance for insurers. When a company insures a large or unusually risky asset — such as an industrial plant, a bridge, or an aircraft fleet — it typically does not wish to bear the entire risk on its own. Part of the risk is transferred to a reinsurer, which frees up capital and protects the company from potentially large losses. Around the world, this often-underappreciated mechanism supports the stability of insurance markets, facilitates the international diversification of risks, and provides large investment projects with the financial capacity necessary for their implementation.

Countries that build strong domestic reinsurance capacity gain a range of benefits: they reduce dependence on foreign reinsurance markets, increase the resilience of the insurance sector, and expand the capacity to cover large domestic risks. Industry researchers have been discussing this for decades. Scholars such as Emmett J. Vaughan and Therese M. Vaughan have described reinsurance as an essential tool for financial risk management, particularly because it reduces the burden on an insurer's own capital. Other researchers, including George E. Rejda and Michael McNamara, have noted the broader role of reinsurance in covering large losses, maintaining competition in insurance markets, and enabling insurers to launch new products without having to retain every risk on their own balance sheets.

David Cummins, whose work is frequently cited in this field, has studied the link between reinsurance markets and broader financial stability. Reinsurance companies play an important role in managing catastrophic risks, and their efficiency increasingly depends on their ability to leverage technology and data effectively. This link between digitalization and reinsurance efficiency is also reflected in contemporary industry research.

The Swiss Re Institute highlights artificial intelligence, big data, and other emerging technologies as factors transforming risk assessment and the entire insurance value chain, while the growth of catastrophic risks places increasingly high demands on risk modeling and capital. Munich Re's research also emphasizes the growing importance of climate risk assessment and ESG principles in the insurance and reinsurance industry.

International organizations reach similar conclusions from a public policy perspective. The International Association of Insurance Supervisors emphasizes the importance of effective risk assessment, transparency, and robust risk transfer mechanisms for well-functioning insurance markets. The OECD also recognizes insurance and reinsurance as key mechanisms for risk diversification and the efficient allocation of capital across markets. Financial sector development studies, in turn, point to the importance of strengthening domestic financial institutions and risk-taking capacity in emerging markets.

This international experience provides an important context for the reform in Uzbekistan. The creation of a national reinsurance institution in accordance with Presidential Resolution No. PP-191 reflects the state's commitment to strengthening domestic risk-taking capacity, supporting the development of the insurance market, and building a closer link between Uzbekistan's growing economy and international reinsurance markets.

### What Has Changed in the First Year

The most visible change has been digitalization. Prior to the reform, reinsurance processes in Uzbekistan were largely fragmented and paper-heavy: contracts were negotiated and signed through multiple manual channels, and there was no single centralized platform to manage offers and associated data. The National Reinsurance Organisation helped transition the market to a more unified electronic format.

The changes have affected virtually all key processes:

The platform does more than just speed up workflow. Consolidating reinsurance offers in a single electronic environment creates a more consistent process for market participants and improves the traceability of decisions and transactions. This can help reduce opportunities for informal influence while enhancing accountability and transparency. In addition, the likelihood of common human errors is reduced: the volume of repetitive manual data entry is decreased, fewer documents are passed between departments, and auditors and regulators receive a clearer digital trail of transactions.

For a market that previously operated without a centralized digital infrastructure, this is more than just a cosmetic upgrade. It has the potential to transform the speed at which domestic insurers place large risks, the efficiency with which international reinsurers assess opportunities, and the ability of regulators to monitor aggregate market risks and identify emerging threats.

### Building International Connections

A national reinsurer can only be effective if it is capable of providing coverage for large and complex risks, which requires strong connections with international markets. During its first year of operation, the company established partnerships with reinsurers in Europe and Asia, as well as with insurance companies in the CIS countries. In addition, cooperation was established with international reinsurance brokers, which expanded access to global markets, strengthened underwriting practices, and provided Uzbek specialists with opportunities for international training and knowledge exchange. Several international seminars and educational programs were held during the year to enhance the professional competence of employees — a recognition that technology alone is not enough to build a competitive reinsurance market: a skilled workforce is equally important.

According to the company, the results are already visible: the capacity for international placement of large risks has grown, the potential for risk transfer within the domestic insurance market has strengthened, and dependence on international markets has decreased where domestic capacity can now be built. The company has also begun to create conditions for increasing the share of reinsurance business retained in the domestic market, while providing local insurers with more opportunities to accept large and complex risks with the support of a specialized national reinsurance institution.

### An Honest Look at Strengths and Gaps

The company does not describe its first year as a flawless journey. An assessment conducted in the format of a SWOT analysis shows both the progress achieved and the remaining challenges.

Strengths include significant government support, fully digitalized processes, an operational unified platform, and the establishment of a specialized national reinsurance institution. At the same time, the company does not yet have an international financial strength rating, there is a shortage of specialists with specialized expertise in reinsurance, domestic research and analytical capabilities remain limited, and due to regulatory limits on the volume of risks retained by domestic insurers, some of the largest and most complex risks still have to be placed in international markets.

The opportunities, however, are significant. Uzbekistan can position itself as a reinsurance hub for Central Asia, obtain an international financial strength rating, expand the application of ESG principles and digital technologies, and introduce artificial intelligence and big data tools to improve underwriting quality and risk assessment. At the same time, the company faces risks typical of the global reinsurance industry — natural catastrophes, global economic shocks, currency volatility, and intensifying competition from large international players with decades of accumulated capital, technical expertise, and a history of interaction with rating agencies. Building such capabilities and competencies for a new institution will, naturally, take time.

### The First Figures: Six Months of Operation

Financial statements for the first half of 2026 provide a preliminary overview of the company's position. Total assets reached 131.6 billion UZS, with total liabilities at the same level — a balanced position built on a charter capital of 80 billion UZS and long-term investments of 88.7 billion UZS. Current assets amounted to 42.3 billion UZS.

Equity stood at 87.5 billion UZS, and retained earnings at 7.4 billion UZS, representing a solid starting position for a company in only its first year of operations. On the liabilities side, insurance reserves amounted to 12.9 billion UZS, of which 8.1 billion UZS was the reinsurers' share. Thus, net insurance reserves amounted to 4.7 billion UZS. Current liabilities reached 39.4 billion UZS.

Overall, these figures indicate that the company entered its first full year of operation with real capital, rather than just formal commitments on paper. The fact that the reinsurers' share in total insurance reserves already exceeds 8 billion UZS after just two quarters indicates that the company is actively placing risks in international markets, rather than simply accumulating capital while waiting for further developments.

### What Lies Ahead

The company's plan for the coming years is aimed at turning a successful first year of operation into a sustainable market infrastructure. One of the key tasks is to obtain an international financial strength rating. This should increase confidence in the organization from domestic and international partners and strengthen its position in interactions with global reinsurers.

In parallel, the company plans to gradually integrate artificial intelligence, big data, and machine learning into reinsurance operations, as well as explore new risk transfer instruments, including catastrophe bonds, to finance protection against large-scale natural disasters. Such instruments are becoming increasingly important for markets exposed to earthquakes, floods, and other extreme natural events.

The company's ambitions also extend beyond the domestic market. It intends to strengthen cooperation in the field of reinsurance with Central Asian countries and position Uzbekistan as a regional reinsurance hub. Achieving this goal will require investment not only in technology but also in human capital — in particular, it is necessary to build a broader talent pool of specialists with internationally recognized qualifications, and in the future, to establish a specialized underwriting academy or professional training center to develop expertise domestically, rather than relying predominantly on training abroad.

Another priority is the creation of a unified digital analytical database with real-time monitoring capabilities. Such a system would allow the company and regulators to monitor aggregate market risks more effectively and identify emerging risk concentrations 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 own operations and the development of the reinsurance market as a whole. Today, this is becoming more than just a matter of compliance: ESG practices can influence how international reinsurers assess counterparties, manage risks, and build long-term cooperation.

Additional recommendations formulated based on the results of the first year of operation include strengthening protection through mandatory reinsurance programs and further expanding engagement with international reinsurers and brokers beyond the initial network of European, Asian, and CIS partners. Taken together, these measures are designed to strengthen the company's technical capabilities, expand its international connections, and lay the foundation for a more resilient and internationally integrated reinsurance market in Uzbekistan.

### The Broader Context

All of this is not happening in a vacuum. Globally, reinsurers are facing many of the same pressures that Uzbekistan's new national organization will ultimately have to navigate: rising natural catastrophe risks, geopolitical uncertainty, and technological transformation that increasingly favors insurers and reinsurers capable of assessing and managing risks using better data, sophisticated models, and fast tools. Companies like Swiss Re and Munich Re have been tracking these trends for years, and their experience provides Uzbekistan with a useful, though realistically assessed, benchmark of what is required to build sustainable reinsurance capacity. This is not a one-year project, but a long-term effort to accumulate capital, develop expertise and technology, and build international trust.

Domestic economists also advocate for strengthening Uzbekistan's insurance market. Researchers A. Vakhobov, Sh. Abdullaev, and B. Berdiyarov have studied the development of reinsurance relations and the financial stability of insurance companies — areas that, prior to the adoption of Presidential Resolution No. PP-191, lacked a specialized national institution capable of putting these long-term objectives into practice. The creation of the National Reinsurance Organisation provides the institutional framework to address these tasks going forward.

For now, the figures and the reforms implemented point in one direction. A market that previously relied heavily on paper contracts and manual processes is gradually transitioning to a unified digital platform. A country that historically depended heavily on international reinsurance capacity to cover large and complex risks now has a national institution specifically designed to strengthen domestic risk-taking capacity and facilitate access to international markets.

Whether the National Reinsurance Organisation will ultimately become the regional hub its creators envision will depend on its performance in the coming years — obtaining an international financial strength rating, building a strong pool of qualified specialists, developing analytical and technological capabilities, and proving to global partners that the new institution can be a reliable long-term counterparty for large risks.

However, looking at the first year of operation alone, the direction is already clear: the foundation has been laid, and Uzbekistan now has the institutional platform to build a stronger, more resilient, and internationally integrated reinsurance market.