The assets of life insurance companies (LICs) increased to 919.5 billion tenge and made 44.5% of total assets of the entire insurance market.
LIC liabilities at the end of 2022 amount to 745.9 billion tenge, having increased by 17.1% since the year beginning, mainly due to the growth of reserves for non-occurred losses under life insurance agreements (+60.1% or 64.6 billion tenge).
The concentration in the sector is still moderate, 71% of the life insurance market in terms of assets is formed by three large companies: Halyk-Life, Nomad Life and FFLife. However, EIC and KM Life have demonstrated the most significant increase in assets over the year.
Insurance premiums for the year have dropped by 0.8% against the background of a decrease in the volume of premiums on annuity insurance (-33.7% or 46.3 billion tenge). However, the growth in premiums on employee accident insurance (+67.5% or 28.5 billion tenge) and life insurance (+5.7% or 10.1 billion tenge) made it possible to partially balance this decline.
The volume of payments rose by 22.1% due to increase in payments on life insurance (+35.9%), annuity insurance (+11.9%) and accident insurance (+96.1%). As a result, the ratio of payments to premiums grew from 9.3% to 11.4% compared to 2021.
“Insurance premiums have almost completely reached the last year level. However, the growth as of 2021 was due to annuity insurance boom (+77.0%), compulsory insurance of employees against accidents (+67.5%) and life insurance (+5.7%) came to the fore in 2022. The increase in payments in the life insurance sector was associated with a natural growth in payments on annuity insurance (+11.9%), as well as a noticeable increase in life insurance (+35.9%) and accident insurance (+96.1%)”, the FIAK report says.
LICs were supported by legislative changes adopted in July 2022, one of the key points of which was the expansion of the insurance product line. Thus, for the first time in the Kazakhstani market, an educational funded insurance product with a state subsidy has appeared, and there is a possibility of combining the pension savings of spouses to ensure life-long payments to both of them.
“Besides, in order to build public trust in insurance products, the infrastructure providing guarantees of payments and dispute settlements has been reformed. The insured are provided with a full guarantee by Insurance Payments Guarantee Fund on all mandatory and socially significant insurance classes. Thus, considering the dynamics of LIC indices as of 2022, increasing interest in life insurance products, as well as further digitalization of the industry, there is still potential for further sector growth this year,” FIAK concluded.
Photos are from open sources.