- What is happening in the life insurance market?
- We are observing a dynamic growth of the market. We see that all LICs are active: they work with the population, promote annuities, SESS, endowment and investment insurance, this refers to promoting not only compulsory types of insurance.
I believe insurance programs within the framework of State Educational Savings System will be developing in the coming years. This program has been a banking project for a long time, but now LICs are also working in it. The main advantage that insurers provide is that life of the policyholder (parent/guardian) who makes the savings for the child’s benefit is insured. Not only the policyholder contributes money, and insurance company pays return, but also the state premium is accrued under this program. Life is unpredictable, and in case of force majeure, the bank can only present the amount saved by the parent, and the life insurance company pays the entire amount specified in the contract, even if only one payment has been made.
- What is your forecast? What will people be interested in?
- Regarding life insurance, the main demand will be concentrated on SESS and retirement annuities. These two products will be actively developing in the near future. Moreover, insurers are currently working on several retirement annuity products. We will observe variety of programs.
Endowment life insurance is growing steadily, but not at the fastest pace. I believe we need to introduce endowment life insurance into the guarantee system. Besides, the market has already raised this issue several times. The guarantee system of insurance payments has currently been expanded from five to ten insurance classes. The Insurance Payments Guarantee Fund covers all compulsory and socially significant types of insurance. This provides guarantee payments to a wider range of insurance consumers.
Let me remind you that today IPGF guarantees insurance payments to policyholders in the event of forcible liquidation of insurance organization. The guarantees are provided for both, general and life insurance. Over 20 years, the fund has formed guarantee reserves totaling about 13 billion tenge.
The inclusion of endowment insurance in this system will create more confidence among the population (let me remind you how the deposit portfolio of banks grew when the Deposit Insurance Fund began operating in the country).
I would like to note that domestic life insurance companies are offering very interesting savings products to Kazakhstanis today. The insurers have both dollar and tenge savings programs. The return on these products can attract Kazakhstanis, so we believe that in the near future, endowment life insurance will receive an additional impetus for development.
- Is the market of endowment life insurance products growing slow?
- One of the main risks for any insurance products is a fast, explosive growth. Such growth contributes to risk concentration, and LICs are long-term investments for 5, 10, and 15 years or more (for example, annuity programs). I would like to see LIC savings products grow faster, but not dramatically. Awareness of benefits of endowment insurance, increasing awareness of LIC products, and improving the insurance culture will create demand for reliable and beneficial products for people.
- Insurance culture cannot be improved overnight.
- The younger generation, the zoomers, is entering the active phase. They see the world in a more flexible way. They are interested in new things, any insurance products; savings are of a great interest for them.
We can tell that by looking at the market. Almost all insurance companies in the country offer their policies online. It is just the beginning. I believe we will soon see special products for generation Z, as they more actively begin to put forward their requirements and create demand. I am confident that the companies will be focusing on customizing some products.
Photos are from open sources.