KAZAKHSTAN: The development of market in the next 15 years has been discussed

17 September 2012 —
Insurance market demands changes, according to insurers themselves. Thus, customers got only 23 out of 100 tenge paid for insurance in 2011.

The development of insurance market in the next 15 years has been discussed in Almaty. Insurers collected facts to make their forecasts. So, according to the survey, the market has grown by 24% over the past five years. Moreover, the annual average growth rate was less than 5%. Experts came to the conclusion that there would be no market growth without the introduction of new compulsory types of insurance. Insurers suggested changing approach to work in order to strengthen the position of insurance companies.

-Insurance companies insure their customers to make payments. We suggested simplifying this procedure and introduce standard terms and conditions for risks in this respect to avoid any misunderstandings. All insurers should see, for example, fire, traffic accidents the same way. So, no matter what insurance company I turn to, my insurance event is treated the same way at all insurance companies.

Apart from that, experts believe that the introduction of standard or common payment terms for standard risks for all insurance companies will have a positive impact on the market.

-We also suggested introducing a rating system for insurance companies. It would be interesting to know which of them pay more to people so that people could understand which companies to turn to because the price of policies is the same everywhere.

With these changes, the insurance market might reach 1.5% of GDP, or 6.5 billion US dollars by 2027. The retail sector will grow as soon as insurers prioritize the interests of individual clients. Its share in total premiums will presumably reach 60%. 7-8 insurance companies representing insurance clusters with their own infrastructure will be left in the market. Health insurance will actively develop as well.

-The market will grow 4-5 times by that point and mainly due to the introduction of the types of insurance that are in demand, such as health insurance.

-GDP growth of 4% per year, will result in a growth by 60% of the current rate in 15 years. Within favorable market environment it will be a double growth at most.

Every citizen of Kazakhstan spends an average of 60 US dollars on insurance annually. In the US this figure equals two thousand US dollars. Russians buy policies worth 300 US dollars annually. Experts believe that penetration of insurance services in the country will remain at a low level until dramatic changes are introduced in the market.

Read the full story on www.caspionet.kz.
KAZAKHSTAN: The development of market in the next 15 years has been discussed
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