The Ministry of Economy and Commerce has presented for discussion a draft resolution, according to which the State Insurance Company (OAO "GSO") may become the national operator in the field of reinsurance.
In the explanatory note to the draft, it is emphasized that its main task is to create a national reinsurance capacity, which should lead to increased reliability of the insurance market, strengthening the financial stability of insurance companies, as well as protecting the property interests of clients and beneficiaries. This document has been developed in accordance with the Decree of the President of the Kyrgyz Republic dated March 20, 2024, No. 79, concerning measures for the development of the insurance market.
Current State of the Insurance Market
According to information from the ministry, there are currently 16 insurance companies operating in Kyrgyzstan. From 2021 to 2024, the total volume of collected insurance premiums amounted to 11 billion 659.8 million soms, while the loss ratio reached 20.5%, which is equivalent to 2 billion 392.09 million soms.
At the same time, a significant portion of risks is transferred to foreign reinsurance companies. Over the past four years, 3 billion 493.2 million soms have been transferred to foreign reinsurers, which constitutes 29.9% of the total volume of collected premiums.
In 2024, the volume of premiums transferred for reinsurance amounted to 1 billion 499.4 million soms, of which:
- to domestic reinsurers — 221.2 million soms (14.8%);
- to foreign — 1 billion 278.2 million soms (85%).
Cooperation with the Eurasian Reinsurance Company
Kyrgyzstan is a participant in the Eurasian Reinsurance Company (EPC). According to the agreement signed in Yerevan in 2022, the republic owns 2% of the authorized capital of the EPC, which corresponds to 300 million Russian rubles.
Reasons for Choosing OAO "GSO"
The draft resolution proposes to appoint OAO "State Insurance Company" as the national operator for reinsurance, including export risks within the framework of cooperation with the EPC.
The Ministry of Economy notes that GSO has a stable financial condition, qualified specialists, and its own client base. As of January 1, 2025, the company's authorized capital amounts to 1 billion 144.3 million soms, with 100% of the shares owned by the state.
According to the president's decree, the following measures are provided:
- allocation of 150 million soms in 2024 to increase the authorized capital of GSO;
- gradual increase of capital to 5 billion 150 million soms by 2028;
- directing 100% of GSO's net profit until 2027 to increase the authorized capital.
New Rules in the Field of Reinsurance
The draft also includes the approval of the Regulation on the national operator for reinsurance. According to this document, insurance companies, when transferring risks to foreign reinsurers, will be required to first offer at least 10% of such risks to OAO "GSO," with a subsequent annual increase of this figure to 50%.
Transferring risks abroad will only be permissible after receiving a written refusal from GSO. All risks subject to reinsurance within the framework of the EPC will be transferred exclusively through the national operator.
The ministry emphasizes that the adoption of this resolution will help reduce the outflow of finances beyond the country's borders, strengthen the national insurance market, and create a modern reinsurance infrastructure in Kyrgyzstan.
It is expected that the implementation of this initiative will enhance the competitiveness of the insurance sector, ensure the protection of large investment and infrastructure projects, and promote international cooperation in the field of reinsurance.
