bs-preloader__icon
ru kz en

Market growth will be driven by an increase in demand for LIC products - FIAK

The insurance market is showing growth for all key indicators, with the exception of payments, which have decreased by 35.2% compared to the half-year of 2020, according to the latest report by the Financial Institutions’ Association of Kazakhstan (FIAK).
Market growth will be driven by an increase in demand for LIC products - FIAK

An equal contribution to the growth of market assets in the 1st HY this year was made by general insurance (+13.4%) and life insurance companies (+11.4%). Life Insurance Companies account for 40% of the entire sector assets in 2021. Six large companies form 70% of the growth in market assets, they are as follows: IC Eurasia (22%), IC Halyk (18%), FFLife (9%), Nomad Life, Halyk-Life and LIC Eurasia 7% each, respectively.

The volume of insurance premiums grew by 53% to 428.6 billion tenge (75% of the volume of 2020) against the background of increase in demand for LIC products (life insurance and annuity insurance), the segment “personal insurance” grew from 100 to 195 billion tenge (+94 %). The increase in the volume of insurance premiums led to an increase in the sector's income from insurance activities by 48.5%, to 381 billion tenge. About 56% (212.3 billion tenge) in the structure of income by insurance segments are generated by LICs.

The ratio of payments to premiums in the market is 14%in the 1st HY 2021, in the context of segments, LICs make 8.3%, compulsory insurance - 18%. Taking into account the one-time compensation from a large player (47 billion tenge), payments have decreased this year. Without taking into account the specified insured event, the 15.8% ratio of premiums to payments as of previous year would be at a comparable level. About 60% of the sector's premiums and payments are formed by IC Eurasia, Halyk, Nomad Life, Halyk-Life and Kazakhmys.

The growth of income from insurance activities amounted to 56%, investment activities - 20%. The sector's expenses on reserves for insurance payments increased by 27.5%, and operating activities - by 63% compared to the 1st HY 2020. The net profit of the insurance sector amounts to 70.4 billion tenge, which is 6.6% more than in the 1st HY 2020.

The sector's weighted return on average assets (RoAA) declined from 5.2% in the 1st HY last year to 4.5% in the 1st HY this year, and the return on equity (RoAE) fell from 11.5% to 10.3%.

“Despite the general decline in the industry profitability, there are market players with a return on equity which is significantly higher than the market. Further market growth will be driven by an increase in demand for LIC products, as well as increase in demand for general insurance products,” the FIAK reports stated.

Photos are from open sources.

Share
read also
Should I buy annuity for grandchildren?
Should I buy annuity for grandchildren?

The phrase that grandparents love their grandchildren more than children has become a...

Fruit that quickly improves the health of the main longevity organ is found
Fruit that quickly improves the health of the main longevity organ is found

Care for intestinal microbiome is a key component of a healthy life, Profile writes. ...

Uninsured Retirees
Uninsured Retirees

Pension insurance or retirement annuity is an actual way of early retirement savings....

The most interesting materials of the site you have in the mail! Subscribe to the newsletter.

ASK A QUESTION TO THE EXPERT
ASK A QUESTION TO THE EXPERT
Submit your application