KAZAKHSTAN: assets of life insurers in 2020 grew by 38% vs growth of 15% for non-life insurers

17 February 2021 — Marina MAGNAVAL
Total assets of the Kazakh insurance sector in 2020 grew by 23% y-o-y to KZT 1.5 trillion (~EUR 2.9 billion*), writes Allinsurance.kz with reference to the data published on the website of the National Bank of the country.

At the same time, the assets of life insurers grew by 38%, while the assets of the non-life insurance sector - by 15%. As noted by the Financial Supervision Agency, the growth of assets, among other things, was facilitated by the growth in the volume of securities - at the end of last year the share of securities in the assets of insurers amounted to 69.4%. In second place, among financial instruments, are bank deposits (12.8% of total assets), which increased by 4.7% to KZT 190 billion.

The TOP-5 companies in terms of assets include EURASIA, NOMAD Life, HALYK-Life, KazakhExport and HALYK. The largest growth in assets in absolute terms was recorded by NOMAD Life and EURASIA, while Freedom Finance Insurance (+202% y-o-y) became the leader in terms of growth.

Total profit of the insurance sector in 2020 amounted to KZT 114 billion (+46%). The TOP-5 most profitable companies include EURASIA, HALYK-Life, VICTORY, NOMAD Life and HALYK.

Total liabilities of insurers in 2020 increased by 26% to KZT 821 billion, which, according to the Financial Supervision Agency, is due to an increase in insurance reserves in connection with conclusion of new insurance contracts. The volume of insurance reserves at the end of 2020 reached KZT 686 billion (+20%) which is equal to 84% of the total amount of liabilities. Experts note that insurance reserves of non-life insurers increased by 81%, while reserves of life insurers, on the contrary, decreased by 22%.

Total equity capital of the insurance sector last year increased by 20% to KZT 665 billion, at the same time the equity capital of life insurers grew by 40%, and that of non-life insurers - by 17%. According to the Financial Supervision Agency, the growth of this indicator was mainly due to the growth of the charter capital of companies and their income from insurance and investment activities.

Speaking about the results of last year, Oleg KHANIN, Chairman of the Board of Kommesk-Omir, noted that the most important event was the preparation of draft amendments to the legislation on the regulation and development of the insurance and securities markets. These amendments, for example, provide for the revision of tariffs in the most massive class of insurance - MTPL. Oleg KHANIN is sure that updating tariffs is an important problem for the industry. "The current tariff factors do not reflect the principle of social justice in terms of the adequacy of insurance risks, since the last time tariffs were changed in 2007. The insurance community is proposing to revise the model for calculating MTPL tariffs and to establish flexible tariffs in the regional context, depending on the values of loss ratio in the territory of a vehicle registration. For regions, it is proposed to use such parameters as actual loss ratio, reliability factor and targeted loss ratio", he said.

Another important event of the last year was noted by the Chairman of the Board of NOMAD Life Kairat CHEGEBAYEV - the change in tax legislation in relation to life insurance. "Users of accumulative life insurance programs, among other benefits, are now eligible for a tax reduction when calculating their individual income tax. Presence of accumulative insurance policies lead to the fact that less amounts will be deducted from salaries of our clients and they will receive more money in their hands. For us, this is a new incentive for the development and promotion of accumulative insurance programs, because now it has become even more profitable to form future capital with the life insurance companies", Kairat CHEGEBAYEV emphasized.

Oleg KHANIN expects this year to resolve the problem of the growing insurance fraud, for this the insurers proposed to include them in the administrative and criminal legislation of Kazakhstan and develop mechanisms under which they can independently investigate cases of suspicion of insurance fraud. Kairat CHEGEBAYEV expects expansion of investment opportunities for life insurers to "improve the choice of investment instruments in view of the long-term obligations of life insurance companies".

* at the following exchange rate:

EUR 1 = KZT 516.79 (as of 01.01.2021)



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