However, besides the legitimate concerns for the costs escalation, a lot of insurers are also seeing a good side for the long term, as "clients that received payments begin to understand the benefits of insurance and will continue to use more actively the services of the insurance companies."
Regarding the claims growth, the representatives of EURASIA have a different opinion. "Increased competition leads to lower insurance rates, as well as the expansion of insurance coverage. In this situation, clients should be more responsible in the selection of the insurance partner - the company must be enough capitalized in order to be able to meet its contractual obligations", said in the company's press release.
In order to adapt to the new economic realities, on August 20, 2015 Kazakhstan moved to a free float of KZT. The state representatives' explained that "the switch to the free-floating exchange rate was a "necessary step" given the gloomy medium-term forecasts for oil prices and exporters' demands for a more competitive exchange rate." On that time, Governor of the National Bank of Kazakhstan also argued that "this is not devaluation; this is a transition to a freely floating rate when the market itself determines a balanced exchange rate on the basis of demand and offer." The last devaluation of the KZT, according to analysts, will have a positive impact on the GDP growth in the medium term.
It is also worth mentioning that during the current year a lot of insurers showed significant growth of profitability. One of the explanations is the effect of the tenge's devaluation, as a lot of insurance companies have changed the structure of their assets, increasing the share of foreign currency instruments.
Another important tendency on the local market was the process of mergers and acquisitions. In line with an agreement on the transfer of assets and liabilities between KAZKOMMERTSBANK (one of the largest banks in Kazakhstan and Central Asia) and BTA Bank, all rights and obligations of BTA Insurance and BTA Life were transferred to KAZKOMMERTS-POLICY and KAZKOMMERTS-Life.
Moreover, the other non-life insurance company LONDON - ALMATY (until July, 2015 subsidiary company of BTA) were transferred under the same agreement to KAZKOMMERTSBANK. Moreover, on the domestic insurance market ASIA Life Insurance Company has received license to carry out activities for life insurance segment.
Access www.xprimm.com and download the 3Q2015 Kazakh insurance market statistics.
Market indicators and market ranking (in EUR and KZT):
- Growth rates
- Market shares