XPRIMM: In the first half of 2026, the growth rate of non-life insurance slowed down. How would you characterize the development model of this sector? How has the premium portfolio changed?

Marina SHIPOVALOVA: In the first half of 2026, non-life insurance indeed experienced a noticeable slowdown. Premium growth stood at approximately 4% year-on-year, whereas the sector had grown by 22% in 2025, reaching KZT 863 billion.

In my view, this indicates not a cessation of growth, but rather the sector's transition to a more mature and uneven development model. Previously, its growth was driven largely by a recovery in business activity, bank-based sales, and mandatory or basic products. Now, this growth is becoming less uniform: some segments continue to expand, while others face pressure due to regulatory changes, a decline in certain sales channels, and shifts in consumer demand.

In the first half of 2026, premiums in accident and health insurance fell by 25%, while mandatory travel insurance dropped by 14%. This decline was partially offset by growth in other lines: property insurance rose by 8%, liability insurance by 1%, and CASCO (Motor Hull) by 6%, while the compulsory motor third-party liability (MTPL) portfolio expanded by 17%.

The premium structure has also shifted. As of July 1, 2026, mandatory and basic products—including motor and property insurance—accounted for approximately 64% of total GWP. Motor insurance represented about 28% of the total, while the share of property insurance rose to 36%, up from roughly 30% in 2023. This represents a significant structural shift. While the non-life sector remains reliant on mandatory and mass-market products, importance of property insurance is gradually increasing. At the same time, sluggish growth in comprehensive motor insurance (CASCO) and pressure on compulsory motor third-party liability (MTPL) insurance indicate that the motor insurance segment remains highly sensitive to pricing, claims inflation, and loss ratios.

Broadly speaking, development of non-life insurance in Kazakhstan can currently be characterized as dependent on regulation and credit activity. Current market trends continue to be shaped by regulatory changes and banking activity, particularly in the mortgage and car loan sectors.

Against this backdrop, the key challenge is to transition from growth driven by mandatory and bank-linked products to a more sustainable model - one characterized by growth in voluntary insurance, corporate insurance, property and liability coverage, catastrophe risk insurance, and new digital products.

In the first half of 2026, the largest players in non-life insurance by premium volume were:

 

 

1. Eurasia Insurance Company with a 29.1% market share (+7% y-o-y);
2. Halyk Insurance Company with a 25.2% share (+18.4%);
3. Freedom Finance Insurance with a 9.4% share (-8% y-o-y).

The highest growth was recorded in the following insurance classes:

 

 

 

 

• Voluntary property insurance – up 8% (15.1% share of the market portfolio);
• Compulsory motor third-party liability insurance – up 17% (7.3% share of the market portfolio);
• Voluntary motor hull (CASCO) – up 6% (4.3% share of the market portfolio).

Negative trends were observed in the following insurance classes:

 

 

 

 

• Voluntary accident insurance – down 88% (share of the market portfolio fell from 9.4% to 1.0%);
• Voluntary cargo insurance – down 14% (share of the market portfolio fell to 0.7%).

The decline in the shares of non-life LoBs in the market - despite an increase in premium volume - is attributable to the faster growth rate of life insurance classes.

XPRIMM: How did the situation with non-life assets play out in the first half of the year? Did concentration within the segment change, and if so, how?

M.S.: The situation with non-life assets remains stable overall, though the sector's scale remains limited by international standards. As of mid-2026, total equity of the non-life sector stood at KZT 784 billion.

Looking at the longer term, the assets of Kazakhstani insurance companies grew 2.1-fold between 2021 and 2025 - rising from KZT 1.83 trillion to KZT 3.91 trillion - while their ratio to GDP increased from 2.18% to 2.58%. During this period, assets of non-life insurance companies grew 1.6-fold, rising from KZT 1.05 trillion in 2021 to KZT 1.67 trillion in 2025.

However, the key driver of asset growth in recent years has not been non-life insurance, but rather life insurance. Assets of life insurers grew 2.9-fold, and their share of total market assets increased from 43% to 57%. This indicates that the center of gravity within the insurance market is gradually shifting toward life insurance.

Market concentration in non-life insurance remains high. The five largest companies account for approximately 78% of the market. This means that while the market formally comprises a significant number of participants, the actual competitive and financial weight is concentrated among a limited group of insurers.

This concentration has two sides. On the one hand, large companies - particularly those within financial conglomerates - enjoy advantages in distribution, brand recognition, operating costs, and access to customer bases. On the other hand, high concentration makes market development dependent on the strategies of a few major players, especially in motor insurance, property insurance, and banking channels.

The limited capital scale of individual companies is also evident: 73% of non-life insurance market participants have capital of less than USD 100 million. This constrains their capacity to retain large risks internally and increases the market's reliance on reinsurance.

Therefore, regarding assets and concentration, I would highlight three factors. First, non-life insurance assets are growing, albeit more slowly than assets in the life insurance sector. Second, concentration in non-life insurance remains high, reinforcing the position of major groups. Third, the limited capital of most companies makes reinsurance a critical element of market stability for them.

By mid-2026, the largest non-life insurance companies by assets were:

 

 

 

 

• Eurasia Insurance Company – KZT 692.2 billion;
• Halyk Insurance Company – KZT 299.9 billion;
• Freedom Finance Insurance – KZT 123.0 billion.

As of July 1, 2026, these three companies accounted for 69.05% of all non-life assets, whereas at the beginning of the year, this figure stood at 67.85%. Thus, concentration within the sector is increasing.

XPRIMM: How would you describe the trends in non-life paid claims, and which lines of business contributed the most—and why? Did the claims-to-premiums ratio change?

M.S.: According to the regulator, non-life insurance posted a strong underwriting result in 2025, with a net combined ratio of approximately 77%. This performance was driven by stricter underwriting procedures and favorable claims trends in liability and property insurance.

However, in a recent report on the Kazakhstan's insurance market, S&P Global Ratings projected that the net combined ratio would normalize to the 80–85% range during the 2026–2028 period.

This implies that the ratio of claims and expenses to earned premiums is likely to rise from the exceptionally strong levels seen in 2025, while remaining within profitable territory. In other words, while the market does not appear to be loss-making overall, underwriting margins may contract.

Particular attention should be paid to motor insurance (compulsory motor third-party liability and voluntary motor hull insurance/CASCO), as Kazakhstan’s non-life market is susceptible to claims-related volatility due to a significant share of motor insurance - approximately 28% of GWP as of mid-2026. MTPL rates have historically fell behind inflation in claims costs and car parts prices, and a recent rate revision proved insufficient to offset the long-term decline in underwriting margins.

Consequently, compulsory motor insurance is likely the key driver of pressure on claims costs. The reasons are clear: rising repair and car parts costs, inflation in service charges, high claim frequency, and a lack of rate flexibility relative to actual risk. Meanwhile, premium growth in Motor Hull (CASCO) is slowing, limiting the sector's ability to offset losses incurred in the compulsory motor liability segment.

The situation in property insurance appears more stable. The share of this line of business is growing, reaching 36% of GWP in the first half of 2026. However, as the portfolio of insured property expands, so will the significance of catastrophic risks, risk concentrations, quality of reinsurance protection, and accuracy of insured values. At the same time in the event of major catastrophes, a sharp rise in the loss ratio for property insurance is unlikely. Given the low penetration of catastrophe property insurance in Kazakhstan (approximately 3.2%), there would undoubtedly be a significant gap between economic loss and insured loss - even under the worst-case scenarios - meaning the impact on the loss ratio for this LoB would not be fatal.

In short, the claims-to-premium ratio appears to be normalizing following a highly favorable 2025. Motor insurance drives the bulk of the claims portfolio - specifically Motor Hull (9.6%) and, above all, MTPL (41.6%) - while property insurance remains a growing segment (26.5%) that nonetheless requires careful management of catastrophic and large-scale risks. Voluntary health insurance (15.9%) is another significant segment affecting paid claims.

According to the regulator, non-life paid claims rose by 5% in the first half of 2026, while premiums grew by 4%. The claims-to-premium ratio stood at 34.5%, compared to 33.4% the previous year.

XPRIMM: Would you say that non-life insurance results in the first half of the year were positive? What do you think the trend will be in the second half of the year?

M.S.: Overall, the non-life insurance results can be assessed as positive, though not as strong as in 2025. The sector maintains profitability, capital strength, and investment income; however, premium growth has slowed, while pressure on loss ratios, competition, and pricing has intensified.

In 2025, non-life companies posted a net profit of KZT 131 billion and a return on equity of 19.1%.

Investment income provides strong support to the market. Over the past two years, investment yields in the sector ranged from 9% to 13%; despite expected interest rate cuts, it is reasonable to assume that domestic market yields will remain high enough to support operating performance.

However, there are risk factors as well. Profitability may experience volatility due to intensifying competition, rising paid claims, and currency risks - given that some Kazakhstani insurers hold between 20% and 50% of their investments in foreign currency.

I would expect moderate growth in the second half of the year, though not a return to the figures seen in 2025. The second half should outperform the first, provided activity recovers in specific segments and growth continues in property, compulsory motor third-party liability (MTPL), voluntary motor insurance (CASCO), and liability insurance.

Four factors will shape these dynamics:

 

 

 

 

1. Motor insurance. Compulsory motor third-party liability insurance (MTPL) remains the largest source of both premiums and loss-ratio risk. If inflation in repair and spare parts costs continues to outpace tariffs, margins in the segment will remain under pressure.
2. Banking activity. Mortgage and car lending continue to influence sales of property insurance, comprehensive motor insurance (CASCO), and related products.
3. Competition. As market growth slows, insurers may compete more aggressively for customers, which often affects pricing discipline.
4. Anticipation of reforms. The insurance market development program through 2030 and the new insurance law may alter market players' expectations—particularly regarding compulsory insurance lines, digitalization, consumer protection, and the transition to risk-based supervision.

The regulator has identified key objectives, including development of voluntary and long-term products; enhanced consumer protection; improvements to digital, statistical, actuarial, and human resource infrastructure; financial stability; risk-based supervision; and a stronger role for the insurance market within the pension and capital markets.

In my view, the second half of the year will be moderately positive but more challenging in terms of profit quality. The market will grow, but the key question is whether it can maintain underwriting discipline and avoid a rise in loss ratios in the motor insurance segment.

XPRIMM: How did the life insurance sector perform in the first half of the year compared to the non-life one? Which products play a key role in life insurance development, and why?

M.S.: Life insurance performance in the first half of 2026 was significantly stronger than that of the non-life insurance sector. While non-life insurance sector grew by approximately 4%, life insurance recorded a 30% year-on-year increase in GWP. Pension annuities were the key driver, with their volume surging by 102%.

This highlights a fundamental difference between the two sectors. Non-life insurance relies heavily on compulsory LoBs, motor insurance, property insurance, banking activity, and current consumer demand. In contrast, life insurance growth is driven by long-term products linked to retirement planning, savings accumulation, income protection, and regulatory changes.

Life insurance had been the key driver of premium growth in the Kazakh market from 2021 to 2025. The most significant acceleration occurred between 2023 and 2025, partly due to liberalizing the use of pension savings starting in 2024, which boosted development of annuity insurance.

Three product groups play a key role today:

 

 

 

 

1. Pension annuities. This is the key growth driver. They allow a portion of pension savings to be converted into an insurance-based model of lifetime or long-term payments. Growth in the segment is driven by regulatory initiatives, evolving pension agenda, and client interest in regular-income products.
2. Term life insurance. This product serves as essential protection for families, borrowers, income, and financial obligations. It has growth potential across multiple channels, including individual sales, banks, employers, and digital platforms.
3. Accumulative life insurance. This is a long-term product that combines insurance protection with capital accumulation. Its importance will grow alongside rising financial literacy, development of tax and regulatory incentives, and increasing demand for long-term savings beyond traditional bank deposits.

In the mid-term, premium growth in life insurance will be driven primarily by these product categories.

In the first half of 2026, the primary contributors to growth in life insurance were:

 

 

 

 

• NOMAD Life Insurance Company, with a 29% share of premiums (+29%);
• HALYK Life Insurance Company, with a 22% share of premiums (+27%);
• FREEDOM LIFE Insurance Company, with a 15% share (-26%).

It should be noted that as of July 1, 2026, there were 10 life insurance companies operating in Kazakhstan; however, the two leading insurers accounted for 72.2% of total GWP. This indicates a relatively high concentration in the life insurance sector, although there is a downward trend, given that the figure stood at 77.6% a year earlier.

XPRIMM: What potential does the life insurance sector hold within the country's financial system?

M.S.: Life insurance holds significant potential within Kazakhstan’s financial system, serving not only as a form of insurance protection but also as a source of long-term capital.

During a recent roundtable discussion involving Kazakhstani insurance companies - where key reform directions for the insurance market through 2030 were presented - the Agency for Regulation and Development of the Financial Market explicitly stated that, globally, the insurance market (alongside the banking sector) acts as a source of long-term capital. Furthermore, insurance should be viewed as an institution of shared responsibility among the state, citizens, and the business community regarding potential risks.

Life insurance is particularly significant in this context because life insurance companies generate long-term and relatively predictable liabilities. This enables them to invest over longer horizons than most non-life insurance companies. Consequently, a developed life insurance sector can support capital markets, the pension system, infrastructure financing, and long-term household savings.

Data from the Agency shows that this process is already underway. Between 2021 and 2025, the assets of insurance companies grew from KZT 1.83 trillion to KZT 3.91 trillion, while the assets of life insurance companies increased 2.9-fold. Their share in the total insurance market assets rose from 43% to 57%.

By mid-2026, capitalization of the life insurance sector had reached KZT 562 billion, up from KZT 541 billion in 2025. The Agency expects life insurance companies to continue building capital as insurance premiums grow.

However, the sector's potential is constrained by the capital market development. Capital markets that are less developed than those in Western Europe limit life insurers' ability to manage asset-liability mismatches. In Kazakhstan, the range of available long-term instruments remains largely restricted to government bonds and bank deposits.

For this reason, development of life insurance must proceed in tandem with the capital market development. Without a sufficient supply of high-quality long-term instruments in the economy - such as government, corporate, infrastructure, and mortgage bonds - life insurance companies will be unable to fully realize their potential as long-term investors.

XPRIMM: What trends in life insurance paid claims were observed in the first half of the year, and what factors are affecting the sector's profitability?

M.S.: In 2025, the net profit of Kazakhstani life insurance companies rose by 37% to KZT 186 billion. This growth was driven by strong underwriting results and investment income.

In the first half of 2026, the net profit of life insurance companies fell by 15% year-on-year to KZT 75 billion. The decline was driven by an increase in net financial expenses related to insurance contracts - stemming from discount rate adjustments - and currency losses caused by exchange rate volatility.

However, the pressure on profitability was partially offset by strong underwriting performance and steady investment income. In other words, while the sector's operating model remains profitable, reported financial results are becoming increasingly sensitive to interest rates, currency fluctuations, and accounting effects.

Nevertheless, the life insurance sector’s profitability will remain at a moderately high level compared to other segments of the financial market, influenced by a few key factors:

 

 

 

 

1. Investment income. S&P forecasts that the average investment yield for life insurance companies will reach approximately 11% in 2026–2027, driven by the capitalization of currently high interest rates. However, investment income is expected to decline gradually as interest rates fall.
2. Pension annuities. On one hand, they are the key growth driver. On the other, an increase in guaranteed rates for pension annuities in 2026 could lead to a normalization of underwriting profitability, given that pension annuities account for roughly 50% of GWP.
3. Asset-liability management. Long-term instruments, asset-liability matching, interest rate risk, and the ability to invest funds at rates sufficient to meet client guarantees are critical for the life insurance sector.
4. Competition. As the market expands, competition among life insurance companies will intensify, particularly regarding pension annuities, savings-oriented products, and sales channels.

Life insurance paid claims in the first half of 2026 totaled KZT 109.4 billion, a 68% increase year-on-year. The bulk of these payments stemmed from pension annuities (46.7%) and employer liability insurance (27.2%).

XPRIMM: What do you think will affect life insurance development in the second half of the year?

M.S.: Five key factors will affect life insurance development in the second half of the year:

 

 

 

 

1. Performance of pension annuities. This specific segment drove the growth in the first half of the year, with pension annuities increasing by 102%. Consequently, the future trend in the life insurance sector will largely depend on whether demand for pension annuities persists and how the market adapts to higher guaranteed rates.
2. Interest rate environment. Currently, life insurance companies benefit from high yields on domestic instruments. However, interest rates in Kazakhstan are projected to gradually decline between 2026 and 2028. This means that while investment income will remain a crucial profit source, margins on new investments may gradually contract.
3. The new insurance law: initial draft is expected in September 2026, with implementation slated for early 2027. The legislation is expected to focus on expanding product portfolios and increasing insurance penetration.
4. Transition to Solvency II by 2030, which is set to strengthen risk-based capital requirements for insurance companies. This is particularly significant for life insurers, given that their business involves long-term liabilities, investment risks, and guarantees.
5. Development of sales channels and customer trust. The Agency’s program through 2030 specifically highlights development of sales channels and consumer protection, process digitalization, market infrastructure, and growth of voluntary insurance and new business models. For the life insurance sector, this means that growth must be driven not only by pension annuities but also by a broader product range - including family and income protection, disability coverage, savings plans, long-term programs, and digital services.

My forecast for the second half of the year is that the life insurance sector will maintain a faster growth rate than the non-life one, though it will gradually shift from rapid growth in specific products toward a more sustainable and diversified model. The primary growth potential will remain in pension annuities, term life insurance, and savings-related products. However, for long-term development, the market needs to expand investment opportunities, develop long-term financial instruments, boost customer trust, and create products perceived not merely as formal insurance, but as an integral part of family financial planning.

Interview conducted by Marina MAGNAVAL