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.
