Tashkent, Uzbekistan (UzDaily.com) — The creation of a national reinsurer in Uzbekistan will consolidate local reinsurance capacities and enhance the overall financial stability of the insurance sector, according to a report by Moody’s Ratings.

On 23 May, the President of Uzbekistan, Shavkat Mirziyoyev, signed a decree establishing the national reinsurer — Uzbekistan Reinsurance Company. With an initial authorized capital of no less than 300 billion soms (approximately 23 million US dollars), the new company will become one of the largest participants in the domestic insurance market by paid-in capital.

The state will hold a 50% stake, while the National Agency for Prospective Projects (NAPP), acting as the insurance regulator, will represent the state as a shareholder. Moody’s Ratings notes that this structure highlights the company’s government backing and its strategic role in strengthening the national insurance sector.

According to Moody’s Ratings, the establishment of the national reinsurer will consolidate local reinsurance capacity and improve the financial resilience of the insurance system as a whole, which is a positive credit factor for the sector.

Furthermore, NAPP’s involvement is expected to enhance regulatory oversight, enabling more effective monitoring, reducing systemic risks, and increasing transparency within the industry.

The Moody’s report points out that a key objective of the new company will be to reduce Uzbekistan’s dependence on international reinsurance markets and limit the outflow of foreign currency in the form of reinsurance premiums, thereby retaining a greater volume of capital generated by the insurance industry within the country. Retaining reinsurance premiums domestically will allow the government to support the development of the national insurance market and the financial sector overall.

At the same time, the agency cautions that the shift by some local insurers from large international reinsurers with high credit ratings to domestic reinsurance coverage could weaken their individual risk profiles.

Moody’s Ratings also anticipates that the new company will play an important role in supporting smaller insurance organizations, which often face limited access to reinsurers and difficulties entering international markets due to scale and creditworthiness constraints.

Such companies typically rely more heavily on local reinsurers whose credit profiles are generally weaker than those of international or government-backed entities.

By providing a domestic alternative, Uzbekistan Reinsurance Company will reduce counterparty risk in reinsurance and foster the creation of a more inclusive insurance ecosystem, Moody’s Ratings believes.

Smaller insurers will benefit from transferring risks to a more stable and government-supported reinsurer, enhancing their financial stability and underwriting capacity.

Under current regulations, insurance companies in Uzbekistan are required to cede at least 50% of reinsurance to local insurers before seeking foreign reinsurers. However, due to the limited ability of local insurers to retain large risks, most reinsurance premiums are ceded to foreign reinsurers.

The agency emphasizes that, despite the importance of establishing Uzbekistan Reinsurance Company for the domestic market, the company’s reinsurance capacity will be modest on a global scale. This will limit its competitiveness compared to international reinsurers, especially regarding underwriting and technical expertise.

Moody’s Ratings assesses that despite expected growth in domestic reinsurance capacity, large international reinsurers will maintain a key role in the market, particularly in the segment of major commercial and industrial risks that require advanced technical expertise.

The agency concludes that the coexistence of international players alongside the state reinsurer will enable more effective risk management and ensure sustainable market discipline.