Month: June 2025

Motor insurance markets across Central Asia exhibit contrasting levels of development, from Kazakhstan’s expanding, digitized sector to Kyrgyzstan and Turkmenistan, where the system remains largely ineffective. Beyond compensating for damages, motor insurance is increasingly viewed as a tool for strengthening financial markets, promoting road safety, and easing the fiscal burden during emergencies.

Kazakhstan

Kazakhstan leads the region in insurance market volume. According to the Agency for Regulation and Development of the Financial Market (ARDFM), compulsory third-party motor insurance (OSGPO) premiums totaled more than KZT 106 billion ($205 million) in 2023, an 18% increase from the previous year.

Since 2019, Kazakhstan has operated an electronic OSGPO registration system, streamlining policy purchases and reducing fraud. Integration with the Ministry of Internal Affairs databases now enables more effective monitoring of compliance.

In April 2025, the country introduced a revised bonus-malus system with 18 risk classes, ranging from M2 (highest risk, coefficient 3.5) to Class 13 (lowest risk, coefficient 0.5). New drivers are assigned Class A with a coefficient of 1.8. The updated system accounts for accident history, traffic violations, and the duration of accident-free driving.

Despite this progress, voluntary comprehensive insurance (CASCO) remains underutilized; fewer than 5% of car owners hold such policies. Barriers include high costs, limited public understanding, and the persistent mistrust of insurers. Nevertheless, demand for CASCO is growing amid rising accident rates and vehicle costs. Once considered a luxury for owners of new cars, CASCO is increasingly popular among middle-income drivers, particularly those buying vehicles on credit or lease.

According to Ranking.kz, CASCO premiums reached KZT 13.4 billion ($26 million) in January-February 2025, slightly below the same period in 2024 ($29 million) but still well above pre-pandemic levels. CASCO now covers a broad range of risks, including accidents, theft, vandalism, fire, and natural disasters. For many Kazakhstani drivers, comprehensive coverage is becoming a central part of their financial strategy rather than a discretionary purchase.

Kyrgyzstan

In Kyrgyzstan, however, the motor insurance system is largely dormant. Although a compulsory insurance law was passed in 2015, only 8-10% of the vehicle fleet is insured. The absence of a unified digital platform, weak interagency coordination, and low public confidence hinder progress.

The authorities intend to relaunch reforms in 2025, focusing on digital integration between the Ministry of Internal Affairs and the National Bank. Beginning July 1, 2025, fines will be imposed on uninsured drivers: 3,000 KGS (around $35) for individuals and 13,000 KGS (about $150) for foreign nationals and legal entities. The new penalties are expected to promote compliance and foster a stronger insurance culture.

Uzbekistan

Uzbekistan, in contrast, has made substantial strides since 2019. Restrictions on foreign insurers have been lifted, and the Insurance Market Development Agency has spearheaded a digital transformation of the sector. In 2023, motor insurance premiums surpassed 250 billion som, largely from OSGPO policies.

The government has expanded policy coverage and supports online issuance to increase accessibility and competition. As of September 1, 2024, all compulsory motor insurance policies will be digitized and issued through a centralized system. Reforms will introduce risk-adjusted pricing based on driver behavior, accident severity, and violations. The insurance payout ceiling has also been raised to 40 million som, aligning Uzbekistan’s approach more closely with that of Kazakhstan.

Tajikistan

Tajikistan’s compulsory motor insurance system, introduced in 2021, remains in its infancy. Coverage is still below 10%, hindered by low awareness, underdeveloped infrastructure, and weak regulatory oversight.

The National Bank of Tajikistan is working with international partners, including the IMF and IFC, to craft a roadmap aimed at expanding digital access and boosting financial inclusion through improved insurance services.

Turkmenistan

Turkmenistan presents the region’s most restrictive market. All insurance is provided through the state-owned Türkmenistanyn Döwlet Ätiýaçlandyryş Şereketi, with virtually no private or foreign sector participation.

Although compulsory motor insurance has been mandated since 2009, public data on market penetration is unavailable. External estimates suggest coverage is under 20%. Voluntary policies are rare, and low levels of digitization further inhibit development.

Overall challenges and prospects

Across the region, countries face a set of shared obstacles: low public trust, inadequate enforcement of compulsory coverage, insufficient digital infrastructure, and a limited insurance culture. Yet there are signs of positive momentum. Governments are investing in digital platforms, integrating insurance systems with internal affairs databases, and encouraging online and mobile policy access.

Experts anticipate that over the next three to five years, Central Asia will witness meaningful growth in motor insurance, driven by policy reform, technology adoption, and improving public awareness.

Despite possessing vast reserves of medicinal plants, Tajikistan’s pharmaceutical industry remains heavily reliant on imports. Experts are increasingly questioning why the sector has been reduced to a basic “buy-and-sell” model and what is hindering the use of the country’s natural resources.

Abundant Resources, Limited Output

Tajikistan is home to more than 3,500 species of medicinal plants, including licorice, mint, valerian, chamomile, motherwort, and even rare saffron. However, this natural wealth has not translated into pharmaceutical independence. In the past two years alone, Tajikistan has imported roughly $84 million worth of medicines.

Currently, 67 pharmaceutical companies are registered in the country, producing around 600 types of drugs. Still, imported pharmaceuticals dominate the market. According to industry observers, the sector has evolved into a retail-focused trade, rather than a hub for research-based production.

During the Soviet era, pharmaceuticals in Tajikistan were closely integrated with scientific institutions. Research institutes flourished, pharmacies compounded custom medications, and both training and quality control were rigorous. Following the collapse of the USSR, this infrastructure disintegrated. The responsible state committee was dissolved, and a previously regulated system was replaced by an unstructured market.

Today, training programs are often accelerated, pharmacists’ qualifications are inconsistent, and the emphasis has shifted from treatment to sales.

A Pharmacy That Heals

Amid this decline, one notable exception is found in the city of Isfara, where a phytotherapy department has been established at the local hospital. Spearheaded by pharmacist Abubakr Faiziev, the department operates out of a restored facility where locally gathered herbs are used to produce traditional infusions and decoctions. Faiziev personally collects about half of the ingredients.

“It is important to me that the pharmacy heals, not just sells,” he said.

According to Faiziev, approximately 80% of patients return for follow-up treatment, often bypassing conventional doctors due to the perceived effectiveness of herbal therapies, a sentiment echoed even among members of the local elite.

A Science in Decline

Faiziev laments the erosion of scientific ambition in the country.

“People now ask for business plans and guaranteed profits instead of pursuing knowledge. But science doesn’t work that way,” he said.

Research, he noted, has become sporadic and often relies on outdated data, with little interest from private companies in investing in innovation.

Young professionals, too, are increasingly opting for commercial routes. “They prefer to open pharmacies for fast income rather than engage in research,” he explained. “There are many pharmacists now. But we must transform quantity into quality. Without passion for the profession, one cannot become a skilled expert.”

The State’s Role and Untapped Potential

President Emomali Rahmon has repeatedly stressed the need to develop the domestic pharmaceutical industry and better utilize Tajikistan’s natural resources. Ongoing reforms include updates to medical university curricula, the opening of laboratories, and the training of technologists and quality control specialists. Yet, experts argue that without a comprehensive, systematic strategy and active engagement from the private sector, these measures are insufficient.

Faiziev advocates for the creation of a pharmaceutical technology park and the development of both the domestic and export markets. He has submitted a proposal to the Ministry of Health to hold training courses for regional professionals but has yet to receive a response.

“I am not claiming that herbal medicine is a cure-all,” Faiziev concluded. “But there is a vast sector where natural remedies are most effective. They are accessible, safe, and cost-efficient.”