Why is this important
The reinsurance company will reduce the dependence of Uzbek insurers on foreign reinsurers (Swiss Re, Munich Re), who take 70-80% of premiums. This will keep money in the country, reduce the cost of insurance for businesses. Protecting investments through reinsurance will attract risk-taking foreign investors. Partnership with world leaders will transfer technology and expertise.
What happened
- The Cabinet of Ministers approved the establishment of the National Reinsurance Company of Uzbekistan;
- Authorized capital — 300 billion soums ($24.9 million);
- NAPP owns 50%, private investors (international reinsurers) – 50%;
- The company will protect investments, insure project risks, and open accounts abroad;
- The NAPP contributes 5% of the capital per month, the rest — per year in equal shares;
- Dividends until 2031 are directed to the NAPP.
Company powers
- Open accounts in foreign banks, make payments;
- To carry out insurance payments and operations related to insurance and investments;
- Purchase equipment, machinery, communication devices, and software by selecting the best offers (without online auctions).
Company tasks
- Reinsurance protection of direct and portfolio investments;
- Insurance of risks during the implementation of projects by foreign and local investors;
- International cooperation in the field of reinsurance.
Context
What is reinsurance: it’s insurance for insurance companies. When an insurer assumes large risks (for example, insuring a factory for $100 million), it transfers a portion of the risk to the reinsurer to avoid bankruptcy.
Problem: Uzbek insurers transfer 70-80% of premiums to foreign reinsurers (Swiss Re, Munich Re, Hannover Re), as they do not have their own reinsurance company. This drives money out of the country and increases insurance costs.
The solution: the creation of a national reinsurance company will keep money in the country, reduce the cost of insurance for businesses, and transfer risks to state control.
International partners: attracting world leaders (Swiss Re, Munich Re?) will transfer technologies, expertise, and international standards. This is crucial, as reinsurance requires complex risk analysis, actuarial calculations, and reserve management.
Investment protection: The National Reinsurance Company of Uzbekistan will insure the risks of large projects (infrastructure, energy, industry), which will attract foreign investors who fear expropriation, political risks, and force majeure.
Accounts Abroad: The right to open accounts in foreign banks will allow the NRCU to conduct international operations, receive premiums from foreign partners, and pay compensation to investors.
Procurement without bidding: the right to purchase equipment and software without online bidding will accelerate the launch of the company, but will create risks of corruption and price gouging.
NAPP dividends: until 2031, dividends on the state’s share (50%) are directed to NAPP for financing promising projects. This means that the NRCU will work for self-sufficiency, but the profit will go towards economic development.
Capital of 300 billion soums ($24.9 million): this is the minimum capital for starting work. For comparison: the world’s largest reinsurers have a capital of $10-50 billion. However, $25 million is a sufficient amount for the Uzbek market.
