KAZAKHSTAN: Fitch Ratings: the market is largely recovering after difficult second quarter

17 November 2020 — Marina MAGNAVAL
After a decline in 2Q2020, the insurance market of Kazakhstan is demonstrating resilience to the effects of the pandemic crisis with GWP largely recovering in 3Q2020, as Fitch Ratings noted in the report, published on November 12.

Due to the first restrictions, imposed in March-May, GWP faced a 21% drop y-o-y in 2Q2020. All insurance lines were affected - non-life (-17%), life (-30%), personal (-14%). But despite the second set of restrictions in July-August, the market recovered in 3Q2020 with non-life sector benefiting from MTPL renewals and life insurance driven by US dollar-denominated hybrid products, supported by depreciation of the Kazakh tenge and low yields on bank deposits. On the other hand, due to cost-cutting by commercial policyholders and cross-border travel restrictions, personal lines continued to drop.

EURASIA and HALYK, two leading insurance groups, increased their MTPL total share from 37% in 2019 to 50% in 3Q2020, though their access to bancassurance sales channels and by offering higher commission rates. Fitch expects market competition to intensify in 2021 with insurers trying to improve their MTPL positions, given the limited growth opportunities in other segments.

More details can be found here.

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