ECONOMIC EFFICIENCY OF COMPULSORY AND VOLUNTARY INSURANCE TYPES

Abstract

Insurance systems are generally divided into compulsory and voluntary types, each serving distinct economic and social functions. Compulsory insurance ensures minimum protection for society and reduces the financial burden on the state, while voluntary insurance promotes individual financial security and market-based risk management. This study examines the economic efficiency of compulsory and voluntary insurance types within the context of developing insurance markets, particularly Uzbekistan. The research analyzes premium volumes, claims ratios, coverage levels, and financial sustainability indicators to assess the relative effectiveness of both insurance forms. The results demonstrate that compulsory insurance provides social stability and broad risk coverage, whereas voluntary insurance contributes to profitability, diversification, and long-term capital accumulation. The paper proposes strategic recommendations aimed at balancing both systems to enhance the overall performance and sustainability of the insurance sector.