Last year, total assets of Tajikistan’s insurance companies increased by 28 percent and their total equity increased by 49.8 percent.
The head of the National Bank of Tajikistan, Hokim Kholiqzoda, noted this at a meeting that took place at the NBT on January 6 to review the past year’s results of the insurance market activity.
According to him, total authorized capital of the country’s insurance companies last year increased by 91.6 percent.
According to the NBT press center, the NBT head also noted that total investment revenues of the country’s insurance companies increased almost 2.1 times in 2021.
Tajik regulator head explained such a significant jump by the emergence of new insurance organizations “as a result of the application of a number of measures in the country's insurance market,” the NBT press center says.
Speaking at the meeting, the NBT head reportedly instructed insurance companies to work more actively with the private sector, first of all, with the agrarian sector, whose share in the country’s GDP is about 23 percent.
Recall, the Tajik government in late March 2020 revised minimum capital requirements for insurance companies upwards to 2 million somonis and 50 million somonis, depending on the forms of property.
The insurance and reinsurance companies were given a year to comply with the revised minimum capital requirements, until April 1, 2021.
Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insurance liabilities to the other insurance company. The company that purchases the reinsurance policy is called a "ceding company" or "cedent" or "cedant" under most arrangements. The company issuing the reinsurance policy is referred to as the "reinsurer". In the classic case, reinsurance allows insurance companies to remain solvent after major claims events, such as major disasters like hurricanes and wildfires
The previous minimum capital requirements for insurance companies were 5 million somonis for state-run insurance companies and 500,000 somonis for private insurers.
The new minimum capital requirements for the insurance companies are: not less than 10 million somonis for state-run insurance companies; 2 million somonis for private insurance companies dealing only with “general insurance category; not less than 10 million somonis for private insurance companies dealing with compulsory insurance along with other categories of insurance; not less than 5 million somonis for private insurance companies dealing only with “general insurance” category; and not less than 50 million somonis for state-run and private reinsurance companies.
The authorities justified their decision to revise the minimum capital requirements for insurance companies by saying that “the share of insurance penetration into the economy is equal to only 0.7 percent of the country’s gross domestic product (GDP), which is one of the lowest rates in the world, and this indicator directly depends on the low requirements for the authorized capital.”
Nineteen insurers now operate in Tajikistan insurance market, including two state-run insurance companies (Tojiksughurta and Tojiksarmoyaguzor), 16 non-state insurers and one mutual insurance support center.
The most active insurers of the private sector are Spitamen-Sughurta with authorized capital stock amounting to 90 million somonis, Sughurtai Avvalini Milli (71.3 million somonis) and Paimon Insurance (12 million somonis).
Among the prevailing classes in the market it is worth noting property insurance, personal insurance, liability insurance and life insurance.
