KAZAKHSTAN: the events of the first quarter led to an increase in insurance claims

27 June 2022 — Marina MAGNAVAL
In the first quarter of 2022, insurers received losses due to volatility in the foreign exchange market of Kazakhstan, Allinsurance.kz wrote with reference to Azamat KERIMBAYEV, Advisor to the Chairman of the Board of Freedom Insurance.

"Together with the dollar exchange rate, the average severity of losses is also growing. For example, if in mandatory motor insurance the average paid claims amount in 2021 was KZT 461 thousand, then in 2022 it is already KZT 497 thousand. In March 2022, the average amount of paid claims reached KZT 511 thousand", said Azamat KERIMBAYEV.

At the same time, according to the expert, since insurers hold their assets mainly in foreign currency, sharp fluctuations in the foreign exchange market affect their profits and losses.

"Profit of non-life insurers from revaluation of foreign currency in February reached KZT 40.2 billion. However, in March, after a 7% appreciation of the tenge, losses from revaluation amounted to KZT 18.2 billion. Total net profit of insurers before taxes in the first quarter of 2022 amounted to KZT 25.5 billion", the expert explained.

Azamat KERIMBAYEV also noted that in connection with the events at the beginning of this year, non-life insurance companies increased their total sales by 23%, to KZT 135.6 billion. This was supported by voluntary property insurance, insurance of medical expenses, etc. In January, the insurance business suffered losses in the amount of KZT 94 billion. As a result, the demand for insurance of property against damages during mass unrest and riots has sharply increased.

"The demand for this (property) type of insurance allowed companies to increase premium collection by 24% (+KZT 12.8 billion) in the first quarter of 2022. But there were also large losses. Thus, total amount of paid claims in 1Q22 reached KZT 22.3 billion (+32% per year)", the expert emphasized.

*EUR 1 = KZT 517.98 (01.04.2022)

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