The press center of the National Bank of Tajikistan (NBT) says total assets of Tajikistan’s insurance companies rose 90 percent in a year to June 30, 2021, reaching 232.6 million somonis (equivalent to more than 20.5 million U.S. dollars).
An additional investment has reportedly been made within the frameworks of the NBT’s minimum capital requirements.
Recall, the Tajik government in late March last year 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;
– 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.”
Xprimm.com notes that at the end of the third quarter of 2020, the insurance market in Tajikistan expanded by 4.05% to 175.30 million somonis. At the same time, again, growth was provided by voluntary types of insurance, while compulsory insurance continued the downward trend, according to data published by the National Bank.
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 and MUIN.
Among the prevailing classes in the market it is worth noting property insurance, personal insurance, liability insurance and life insurance.
