KAZAKHSTAN: non-life insurers' administrative expenses exceeded 28% of their net premiums in 2019

26 February 2020 — Marina MAGNAVAL
According to the National Bank of Kazakhstan figures, in 2019 non-life companies' profit decreased by 25.5% to KZT 52.2 billion (~EUR 122.29 million).

The paid claims, as the main expense type, amounted to 44.1% of the total net premiums, Allinsurance.kz reports.

The share of administrative expenses in the total net premiums amounted to 28.5% (vs 34.4% in 2018). In absolute terms however, these expenses reached KZT 54.3 billion by the end of 2019, which is 7.9% more y-o-y. Experts believe that this effect is primarily due to the rising costs for salaries of employees and business trip expenses.

Another big portion in expenses of non-life insurers belongs to remuneration of intermediaries. In 2019 the share of remuneration expenses in the total net premiums reached 17.1% (vs. 11.6% in 2018). Experts note that the amount of intermediaries remuneration volume almost doubled in 2019.

The total share of all expenses in premiums earned was 89.7% on average, which, according to local experts, is a "very high and alarming" indicator.

* 1 EUR = 426.85 KZT (December 31st, 2019)
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