For hundreds of years, the Silk Road which provides trade between China and Europe has highlighted the potential of the Central Asian countries, boosting the development of the region located along this route. Currently, this potential is reactivated by oil and gas fields, intensely exploited in the area. Starting from these premises, the insurance segment in the region begins to have an increasing importance in the GDP of these countries, registering year by year a high dynamic of growth.
Attractiveness of Asian markets for European insurers and reinsurers, as well as the exchange of experience between companies served as premises for organizing the Third International Conference in Tashkent, the economic and cultural capital of Central Asia. Having a strategic position in the region, organizers managed to gather at the dialogue table over 200 top-managers and specialist in insurance and reinsurance from 16 countries. Besides them, the event was also attended by representatives of the World Bank, state institutions, supervisory bodies, national and international profile associations, and officials of audit companies, banks and investments.
Conducted between March 8 – 11, current year, the works of the conference organized by the media group SAIPRO, with the support of PRIMM Insurance & Pensions Magazine, addressed the priorities of the insurance market in Central Asia and the development opportunities of reinsurance operations in the region.
Insurance in Uzbekistan – on the route to West
Debates at the first day of the event commenced with analysis of the insurance segment of the CIS countries, of which Uzbekistan has significantly higher growth dynamics. Thus, with a population of about 30 million inhabitants, Uzbekistan has a very low degree of insurance penetration of GDP. However, according to the 2009 results, it remains among the few countries in the world which has registered a positive dynamic of all macroeconomic indicators. Thus, GDP marked a 8.1% increase compared to 2008 and came to own a 47.2% share, compared with 16.3% in 1991, said Olimjon IKRAMOV, President of the Insurance Inspectorate in Uzbekistan. Also, according to official data, the volume of FDI (Foreign Direct Investments) increased by 80% in 2009 compared to 2008, particularly in industry and communications.
Over 60% increase in 2009
In this context, a particular attention has also been paid to the insurance sector, which plays an important role in maintaining economic stability and in public protection. Therefore, in the last six years, the Uzbek profile market has seen a double digit annual growth dynamic (between 16% and 62%). The 33 insurers operating in the field totaled gross premiums of EUR 70 million
in 2009, up 62% compared to the previous year, of which a share of over 74% corresponds to voluntary insurance. At the same time, companies have paid claims of around EUR 10 million, an increase of over 28% compared with 2008. State insurers’ share in total underwritings reached about 40%, in 2002 having been of over 80%. A new impetus for market growth was brought by the introduction, at the end of last year, of mandatory motor insurance (MTPL) and by the mandatory employers liability insurance.
Uzbek insurers cede over 80% of the premiums to foreign reinsurers
The evolution of the reinsurance segment in the region was thoroughly examined at the conference, numerous case studies on the subject having been discussed. According to Talgat KASYMOV, General Manager, TRANSINSURANCE Re, the volume of premiums ceded in reinsurance by local companies amounted to more than EUR 15 million in 2009, up 24% compared to the previous year. However, the limited capacity on the local market and limited financial resources led to the fact that over 80% of the premiums were ceded abroad. The largest share in the volume of ceded premiums, geographically speaking, corresponds to countries such as the United Kingdom (42.5%), Russia (30%), Germany (6.8%) and Spain (3, 8%).
Market trends and innovations
One of the trends is the increase, over the last two years, of reinsurance premiums collected by the local market, which talks about an increased capacity of companies, showed Maksud YAKUBOV, Director, Reinsurance Department, UZBEKINVEST.
He stressed the importance of negotiations with European reinsurers in order to conclude high value contracts, which will determine the increase of the interest of Asian players to achieve the best possible coverage.
Another trend is the increasing interest of insurers in the region for using modern electronic systems for assessment of claims. In this context, Richard NATSCHLAGER, Vicepresident of AUDATEX for Central Europe, revealed the usefulness of such systems to increase efficiency and profitability of insurance companies. We are very flexible in adapting our products and we feel ready to enter this market, said NATSCHLAGER.
Besides these topics there were also held numerous presentations concerning the role of leasing services in developing insurance, loss adjusters, implications on the stock market etc. Looking at the big picture, experts and foreign leaders have noted the positive development of the Uzbek profile market, indicating the interest in establishing partnerships with Asian companies.
Insurance, awards and tourism
The end of the conference was marked by a festive event dedicated to granting awards to the most important players from the Uzbeck insurance market and to the significant achievements from 2009, granted by the Rating Agency SAIPRO. Also, event organizers have prepared, for the guests of the forum, an extensive cultural program, loaded with history and tradition. As part of this program, the guests have visited the city Bukhara, a masterpiece of the Muslim architecture, recognized as an important commercial, cultural and religious center located on the Silk Road.
Together, debates, meetings held, along with the impressive historical and cultural programs have contributed to creating an overall picture of the mentality and civilization of Central Asian countries, an aspect particularly important in developing effective and long-term business relationships. The conference managed to reach its most important objectives, namely the creation of an interactive negotiation platform between European leaders and regional representatives of the insurance market.
