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Vitaly Lyubimov: "Online and 24/7 services are the key to success in life insurance"

Vitaly Lyubimov, Chairman of the Board of Kazkommerts-Life JSC, believes that it is important to develop simple and understandable insurance programs for more active promotion of life insurance services among the population, in addition to various events and meetings. In his interview with he told what else could help the market.
Vitaly Lyubimov: "Online and 24/7 services are the key to success in life insurance"

- Vitaly Vladimirovich, could you mention the important events in the life insurance market of Kazakhstan?
- The most significant events, which were expected by domestic life insurance companies in the insurance market, occurred in July this year. In particular, the amendments to a number of legislative acts regulating insurance activity in our country were made.
Now a local insurance organization with the general insurance license cannot perform reinsurance specializing in compulsory insurance of workers against accidents. From now on, the insurance contracts for this class of insurance in Kazakhstan will be possible to reinsure in life insurance companies and / or foreign-resident insurers. 
In addition, as of January 1, 2019, the activity of insurance agents is not allowed at the conclusion of insurance contracts in electronic form. This will mean to the client that the size of the insurance premium will be less, because the insurance agent fee is excluded, and, therefore, the commission fee is not to be paid or included in the underwriting rate.
The types of insurance where intermediary activity of agents is categorically prohibited are defined. They are as follows:  retirement annuity, annuity of employer's liability, compulsory tourism insurance, federal acquisition insurance contracts, and also cases when the client is a national company or public authorities.
Besides, the restrictions allowing an individual to perform as intermediary on behalf of only one insurance organization operating in life or general insurance are introduced. It means that the insurance agent cannot provide services to several companies operating in the same insurance industry.
Amendments to the Law "On compulsory insurance against accidents in the discharge of his (work) obligations" were also made. 
First, the information on the agent and presence/absence of insurance agent commission should be specified by the insurance contract. This will make the identification of the insurance agent and the amount of his commission fee as transparent as possible. And the client will always be able to find an insurance agent, since the insurance contract will contain his contact details.
Secondly, the size of the maximum commission is excluded, which will allow the insurance company, depending on its own parameters, affecting the rate of return, to determine the amount of commission.
Thirdly, in the absence of insured events during the last five years preceding the date of the contract conclusion, the insurance company has the right to independently determine the correction rates when concluding a new insurance contract. In these cases, the amount of the insurance premium may be lower, due to the application of such a coefficient.
These changes allow us to find an individual approach for clients, based on their break-even history for five years.
In addition, the customers who have retirement annuity agreements with life insurance companies get the possibility of using their pension savings from the SPSF to supplement the retirement annuity contract, and, as a result, the annuity payment increase. 
In our opinion, such changes will contribute to increasing the confidence of our citizens in insurance services, since the state further regulates the activities of insurance agents and does not leave the interests of clients of insurance companies unattended.
- What do you think is necessary to activate people’s involvement in life insurance in Kazakhstan?
- Generally, in order to increase the people’s demand for private life insurance services, special events in the form of seminars, training master classes aimed at improving the insurance culture of citizens are required. And insurance companies are required to create simple and understandable insurance programs.
It is also important to move the insurance policy sales to online mode, as according to the statistics the number of people using Internet in our country has a positive dynamics, and each year the volumes of purchased goods and services via Internet are growing. Therefore, insurance companies need to provide a free access to potential customers for the purchase of insurance services through the Internet.
The customer service for existing customers should also be improved, the assistance must be available to them 24/7. For that, it is necessary to work out the access of clients to personal information through various mobile applications, personal accounts, provide more opportunities to pay insurance premiums through payment terminals, electronic wallets and other mobile applications.
- What can the Kazakhstani insurance market offer in order to increase the people's demand for universal life insurance?
- Some changes being lobbied by domestic life insurance companies for several years have been taken into account in the amendments to the tax code of the Republic of Kazakhstan enacted as of January 1, 2018.
So, in particular, the insurance payments upon termination of the universal life insurance contracts where the insured and beneficiary is the same person are now exempt from income tax. Thanks to this, some clients are now excused from paying income tax upon universal life insurance contract completion. Previously such a tax of 10% from the amount payment was deducted, and it was quite a considerable amount.
Besides, it is important that accumulative insurance is valued by potential customers as an additional investment instrument. In particular, the National Bank of Kazakhstan is considering the possibility of creating life insurance products under which the policyholder would participate in managing the investment strategy of his savings, the so-called unit-linked product. It is expected that this product is in demand on the market, which has been proved by the experience of some CIS and European countries. 


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