The takaful market promises big opportunities in Uzbekistan where 96% of the population are Muslims, according to Mr Abror Mukhitdinov, an actuary and UNDP expert at a recent roundtable.
Outlining some of the benefits that takaful will bring to the country, he said that these include attracting temporarily free funds of Muslims who do not use existing financial instruments, attracting investments into the insurance sector of the republic from countries and funds that adhere to Islamic principles of financing. His comments are carried in a media statement published on the Uzbekistan webpage of the United Nations Development Programme (UNDP).
Roundtable
The UNDP, in cooperation with the National Agency of Perspective Projects of the Republic of Uzbekistan, organised the roundtable discussion and presented an analytical report on the topic “Baseline review on takaful insurance system and implementation recommendation”.
The main goal of conducting the roundtable is to present the report on takaful to the insurance market regulator, insurance companies and other representatives of the insurance industry. Moreover, the organisation of the roundtable meeting gives an opportunity to discuss takaful with the insurance industry and relevant professionals.
The roundtable was held on 6 December 2024, in Tashkent, the capital of Uzbekistan, with more than 40 participants representing the National Agency of Perspective Projects, the Association of Professional Participants of the Insurance Market, insurance companies, the Islamic Development Bank, the International Islamic Academy, the Committee on Religious Affairs, the Muslim Board of Uzbekistan, the Association of Actuaries, and other agencies from the government and the private sector.
Regulatory framework
During the discussions, the relevance of Shariah insurance, the expected market size of takaful, and the minimum required legislative framework was taken note of. Regulation and supervision of the takaful fund, the role of insurance companies, the regulator, and the Shariah Supervisory Board, were also discussed.
Mr Latif Zokirov, head of the Department for Development and Digitalisation of the Insurance Market of the National Agency of Perspective Projects, noted, “Takaful insurance has strengths, risks and needs to be regulated and controlled by the government. This roundtable is one of the first steps in capacity building and sharing knowledge of new ideas and suggestions.”
The roundtable was supported within the framework of the UNDP global project “Insurance Risk Finance Facility (IRFF) in Uzbekistan” financed by the German government, the main objective of which is to provide support to countries participating in the project in the development of the insurance market of Uzbekistan, including integration of policies on insurance into the country’s economic development programme; development of inclusive insurance; financing sovereign risks; risks from natural disasters; and attracting additional investments in the insurance industry, etc.