The development of insurance market is different in each country. However, there are basic common factors that determine the trend of the insurance market moving online.
The global economic crisis of 2008-2013 was marked by global inflation, the bankruptcy of many large companies and mass unemployment. The companies that remained afloat needed to modernize their usual offline service and create new, more convenient products for consumers. It was when large insurance companies in the USA, Great Britain, and Germany began to actively develop and introduce new online insurance products with emphasis on voluntary personal insurance and life insurance.
The worldwide penetration of digitalization started in 2017-2019. It was when most European countries, Japan, China, Russia, Kazakhstan and other developed countries began to actively launch online insurance programs, for example, issuing electronic policies for compulsory civil liability insurance for vehicle owners, medical insurance for tourists traveling abroad and accident insurance.
The COVID-19 pandemic in 2020-2021 has become the most powerful driver for the digitalization development around the globe, including Kazakhstan. Due to strict quarantine and mass social isolation, new insurance products and services that would help insure life and health without leaving home, became necessary. Insurance against coronavirus has become the most relevant online program.
Russian-Ukrainian conflict in 2022: devaluation and inflation that occurred in March of this year due to military events in neighboring countries prompted people to focus on endowment life insurance programs with indexation to the US dollar to preserve and increase capital.
How online insurance is developing in Kazakhstan and worldwide
America is considered the largest insurance market accounting for more than a third of global insurance premiums. The United States were among the first to start digitalization. Accident insurance during natural disasters and health insurance for workers are the most popular insurance programs among Americans.
Over the past 20 years, Chinese insurance has been mainly dependent on personal insurance and life insurance, 41.7% and 30.6%, respectively, of the total premiums in the country. Being the world's second largest insurance market, China is expected to overtake the US in the mid-2030s, according to Swiss Re. Its first online insurance programs were launched in 2017, most of them being auto insurance and risk programs against accidents and critical illnesses.
Along with China, Japan's insurance market is one of the largest in the world. Endowment life insurance products are the most demanded among the Japanese. They most often enter into an agreement on these programs for such purposes as: medical treatment, funeral services, accident, life after retirement, and others. Insurance programs against typhoons, tsunamis, earthquakes and other natural disasters are also in great demand in Japan. Digitalization started in the country during the COVID-19 pandemic in 2020, and in almost a year it covered more than half of the Japanese insurance market. One of the first online insurance products in this country was an electronic policy against coronavirus.
The first electronic insurance products appeared in the early 2000s. However, due to the fact that people did not then have such Internet technologies as they do now, they were not successful. Most European countries already introduced online insurance into everyday life, mainly endowment life insurance, health insurance and programs for pensioners.
As of October 2015, for the first time, Russian car owners had the opportunity to buy electronic compulsory auto insurance policies. The digitalization of the insurance market began in the country from that moment. Life insurance companies began to adapt their insurance programs to the online format, for example, travel insurance and accident insurance, starting from 2017; risky products mostly. Endowment and investment life insurance have become the main insurance trend in the Russian market today.
Digitalization of the Kazakhstani insurance market began in 2019. With the advent of the pandemic in the country and quarantine measures in March 2020, LICs began to actively develop and implement programs in a completely new format. Online programs such as insurance against critical illness, coronavirus, accidents, voluntary insurance for tourists traveling abroad and endowment life insurance with a high annual interest rate in US dollars are presently operating in Kazakhstan.
Photos are from open sources.