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FIAK: Life insurance market demonstrates growth for all the key indicators

The life insurance market is showing growth for all key indicators, particularly, in premiums, which have increased by 74.2% compared to the same period last year, according to the report by the Financial Institutions’ Association of Kazakhstan (FIAK).
FIAK: Life insurance market demonstrates growth for all the key indicators

This year the life insurance market is experiencing an increase in the activity of online sales channels and expansion of online communications with clients due to the active introduction of insurance products online, transferring some part of the workflow to remote mode, releasing mobile applications and personal accounts for clients, introducing chat bots for faster provision of information to the client, as well as presence of insurance companies and their activity on social networks. “The digital transformation of Kazakhstani insurance is an inevitable process that will become the main driver of the industry in the coming years. By offering high-quality digital customer experiences, the insurers will gradually become first-choice companies and strengthen their leadership, as convenience and speed of service are of paramount importance to a retail client today,” the FIAK report says.

80% of the market in LIC assets are accounted for by four large companies Nomad Life, Halyk-Life, FFLife and LIC Eurasia. A significant increase in assets is observed in FFLife by 69% and LIC Eurasia by 62%. “A high demand for LIC products such as life insurance, annuity insurance and employee accident insurance increased the volume of insurance premiums by 74.2% to 276.3 billion tenge against 158.7 billion tenge for nine months of 2020”, indicated in the document.

About 80% of the sector's premiums and fees are accounted for by Nomad Life, Halyk-Life, Standard Life, SAC and European Insurance Company.

A growth in income from insurance activities by 77% and investment activities by 12.6% increased the LIC income by 64%. “A 70% increase in LIC expenses, however, leveled the rapid growth in the sector's revenues. Against this background, the industry's net profit increased 1.3 times, from 25 billion tenge for nine months of 2020 to 34.3 billion tenge for the same period in 2021. The expense items showed an increase in reserves on insurance benefits by 17%, costs on life reinsurance reserves - by 2.2 times, incurred but undeclared losses - by 1.9 times, non-incurred losses of annuity agreements - by 14%. In addition, the commission payment costs increased by 44.4%, reinsurance costs grew 3 times and administrative costs - 2.1 times,” the FIAK experts emphasize.

Photos are from open sources.

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