OREANDA-NEWS. April 21, 2008. Rapid growth and quality changes in the insurance market of Uzbekistan attract foreign insurers. One of the leading insurance companies in Russia and CIS countries “Ingosstrakh” signed a contract to purchase 76% of the Uzbek Standard Insurance Group, reported the Official website www.investuzbekistan.uz.

The “Ingosstrakh” Office in Uzbekistan informs that the company signed the contract within its strategy of expanding its presence in priority insurance markets of such CIS countries as Uzbekistan. The OSC “Ingosstrakh” has been functioning in international and Russian insurance markets since 1947. The company takes the leading position among Russian insurance companies for its great amount of premium for voluntary insurance. Its six offices and seven daughter companies function in far and near foreign countries.

The head of “Ingosstrakh” department for direct investments, Tatyana Kaygorodova says that the development of the company’s cooperation with professional participants of insurance markets in the CIS is a strategically important aspect for Ingosstrakh. The matter directly concerns Uzbekistan, whose policy creates favorable conditions for dynamical development of economy, having good potential.

In turn, the Standard Insurance Group notes that “the combination of highly effective technologies of the “Ingosstrakh” with growth potential of Uzbek company will give an opportunity to intensify innovation process in the market”.

Experts share views of the sides. The choice of Standard Insurance Group, established in January 2005 is evident. Today the company, with USD 1m of chartered capital and having almost all licenses for general insurance, is the leader in Uzbek insurance market and was one of four insurance companies by the amount of insurance premiums last year. The Standard Insurance Group has its regional offices in Ferghana, Samarkand, Bukhara and Gulistan and affiliates in Andijan and Ahangaran. “It is an excellent base for developing business and obtaining considerable market share in Uzbekistan,” says David Laxton, credit analyst of the Standard & Poor’s, London. “It is a rapid extension of geographic coverage of significant and interesting market. To purchase such company is much easier than to set up business from nothing. Your market is rapidly growing and the time is of great importance”.

The amount of insurance premium in 2007 reached 72,3 billion soums and grew nearly 1,5 times; insurance payments increased by 27,4%, reaching 7,9 billion soums. Today, the aggregate liabilities of insurers are around 25,3 trillion soums.

This transaction is remarkable for the local insurance market because it is an extraordinary case of purchasing the Uzbek operator’s control stock by the foreign insurance company. The non-resident companies used to buy only blocking share before.

“Entering of foreigners in the market requires local insurance companies to increase competitiveness,” stressed I.Halimov, deputy director of the State Insurance Inspection of the Uzbek Ministry of Finance. “Foreign investors introduce information technologies in various spheres. It cuts overhead expenses and consequently optimizes the cost of insurance product and improves the quality of insurance services.” Owing to their financial power, foreign companies also develop reinsurance business here, which is more productive and efficient. Because reinsurance will be available, local companies can insure more. Purchasing of the Standard Insurance Group starts another development stage in the Uzbek insurance market. It is the starting point of serious investments in the market.