Although most citizens are familiar with the word 'insurance,' few realize how broadly the insurance system covers various aspects of the economy and society. Umid Khudayberdiyev, founder of three insurance companies and a specialist with over twenty years of experience in this field, presented methods and technologies for operating the insurance market during the FINNEXT Asia forum in Tashkent on November 19. Previously, he worked at the State Insurance Supervision under the Ministry of Finance of the Republic of Uzbekistan.
Drawing on his extensive experience, Umid Khudayberdiyev explained that the economy is a complex system where the interests of the state, business, and citizens constantly intersect, and therefore it is acutely in need of protection. Insurance acts as a key tool for financial defense, contributing to the stability of the national economy, attracting investment, and reducing the burden on the state budget.
The benefits of insurance are distributed among three main groups: the population, which receives stability and protection from sudden financial losses; the state, which partially assumes the function of protecting the population by evenly distributing economic risks; and investors.
When asked about the low level of financial literacy in the country, which leads to the neglect of insurance, Umid Khudayberdiyev suggested correcting the term, pointing to insufficient awareness. He noted that people intuitively understand physical risks, but abstract financial and insurance systems require specialized knowledge.
With the active development of digital platforms in Uzbekistan, such as Gov.uz, MyID, and banking fintech services, the number of fraudulent schemes is also growing. Insurance can protect both individuals and companies from such threats, especially when there is a lack of knowledge in the field of financial protection.
He also mentioned products such as cyber insurance and document insurance. Furthermore, although the state guarantees deposits up to 200 million soms, special insurance products exist for amounts exceeding this limit to help protect citizens' funds from fraudsters.
A transparent mechanism for protecting investor funds is critically important for attracting foreign capital. A serious investor is primarily concerned with the preservation of their capital, not just potential profit. In developed countries, decisions are made collegially, and proof of transaction security is required before major projects.
The reliability of the economy is assessed through the maturity of the insurance market: how quickly it pays compensation and covers domestic risks, rather than relying solely on reinsurance abroad. Since the state cannot provide unlimited guarantees, banks, funds, and insurance companies must independently offer quality assets.
It was noted that there is an imbalance where the banking sector outpaces the insurance sector. However, the insurance industry is actively catching up with the support of banks and the state. Since 2008, three key laws on mandatory insurance have been adopted in Uzbekistan: motor vehicle owner liability, employer liability insurance, and carrier liability insurance.
In the field of Islamic finance, Islamic insurance (Takaful) is entering the market, meeting citizens' needs to preserve savings in accordance with their values, which is an important element of harmonious market development.
High birth rates in Uzbekistan are viewed as a huge resource and the country's main advantage, despite the enormous strain this places on infrastructure and the economy. The expert emphasized that the country is coping with these challenges, and with systemic investments in education and human capital, Uzbekistan can significantly surpass other countries both economically and socially.
Regarding poverty, which may increase with a large population, it is noted that the relevant ministry is systematically working on this issue. The fight against poverty is a comprehensive state program that includes construction, education, and social support. The President rightly noted the achievement of the level of Turkey and Europe in the speed and quality of construction.
The financial sector is interested in developing insurance because commercial banks bear risks associated with non-performing loans (NPL) or damage to collateral. Without insurance coverage, the entire risk falls directly on the bank. Therefore, the development of the insurance sector is critically important for banks.
The main goal of insurers is not only to generate income but also to deeply integrate insurance into the economy and society of Uzbekistan. It was concluded that without insurance, movement is possible, but high levels of development are unattainable.
Risks are a brake on economic growth. The absence of insurance protection forces businesses to avoid risky operations due to fear of losses. The economy is forced to slow down and spend resources on liquidating the consequences of technological and natural disasters. Net economic growth is defined as real progress minus losses from all types of risks.
