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The banker's advice: where to keep savings in

Alexey Akimov, the Deputy Chairman of the Board of SB JSC Sberbank on retail business told how to invest in the future, writes
The banker's advice: where to keep savings in

As already told, in 2018 the life insurance company Nomad LIFE together with Sberbank issued a unique product for the Kazakhstan market of accumulative insurance, Nomad Gold. It allows Kazakhstanis not only to insure the life and health of their loved ones and themselves, but also to save and increase their dollar savings at an effective rate of up to 3.26% per annum with the investment period from three to ten years. It is very important, that this rate is guaranteed and does not depend on fluctuations in prices for currencies, oil, etc. Thus, the market was presented with a unique product that combines the advantages of life insurance policy and an investment instrument.

For example, with insurance for a period from 3 to 10 years for $10 thousand, the total insurance amount (insurance payment) will be from $10,705 to $13,761. And the insurance payment is carried out both in the event of insurance period completion and early, in case of insurance event.

The partner of NOMAD LIFE Company on this product was Sberbank, Kazakhstan. Alexey Akimov, Deputy Chairman of the Board of SB JSC Sberbank on Retail Business, spoke about the partnership of two major players of the local financial market and the advantages of the joint product.

Alexei Vladimirovich, what led Sberbank, Kazakhstan to a partnership with NOMAD LIFE Company for the "Nomad Gold" product?

There are two main reasons. First, in my opinion, there are almost no worthy proposals for currency placement in Kazakhstan. Interest rates on dollar deposits are extremely low, because it is hard for banks to make money on dollar liabilities. And "Nomad Gold" allows providing a client with a good fixed interest rate on the invested money. Secondly, there is now a shortage of interesting products on the market, mainly deposits remained. The securities market in Kazakhstan is still underdeveloped. Meanwhile, in Russia, Europe, and throughout the world, insurance products are quite a big niche in investment sector, and it is actively developing. Therefore, the “Nomad Gold” product covers several unclosed demands on the financial market of Kazakhstan. The product is interesting to us, as it allows make additional offers in the product line to our customers. And I am confident it has great prospects.

Why did such an interesting product of accumulative insurance appear on the market just now?

- Previously, the legislation did not allow financial organizations to move in this direction, but this year the relevant amendments were made and restrictions were lifted. Therefore, in my opinion, the insurance market will now move actively towards accumulative insurance. Now, the insurance companies are working more on situational cases: compulsory car insurance, travel or medical insurance. But there have not been offers of accumulative insurance.

How important was it for you to be guided by the partner’s reputation?

- Very important. I have been working in Sberbank, Kazakhstan for 2.5 years. And before that I worked with insurance companies in Russia, represented from all over the world. Comparing the markets of two countries, you can objectively say that the insurance market in Kazakhstan is poor. There are good companies here, but not enough of them. They are mostly niche companies, or they work with a large bank. And with NOMAD LIFE we have been working for a long time. The company is involved in our credit process, so it was easy for us to assess how NOMAD LIFE works, makes its payments, and how well it provides its services. This is an intelligible for us company. Therefore it was quite logical to launch a common product with a reliable partner.

Besides, this company has a good rating (financial strength rating at B- according to the scale of the international rating agency A.M.Best) and it is on the list of bona fide suppliers of the fund "Samruk-Kazyna", which is also an important indicator.

It is important to understand that our customers will associate the “Nomad Gold” product primarily with Sberbank. That is, first of all, we will be responsible before our customers. Therefore, the reputation of our partner is extremely important to us.

Sberbank, Russia had the experience of launching accumulative insurance products. Was it positive?

- Absolutely. Such products were launched about five years ago in two ways. The first is universal life insurance, in which, by insuring his family or himself, the insured accumulates money and receives income. The second direction is investment, in which insurance and market profitability are mixed. These products are both in ruble and foreign currency. They are still on the market and in demand. And, in my experience, accumulative insurance in dollars is more stable.

In Kazakhstan, despite low interest rates on USD deposits and efforts to de-dollarize savings, 44% of deposits remain in dollar. Do you think some people in Kazakhstan, against all the odds, will be devoted to US dollar?

- Of course. I do not think the state has a goal to come to a hundred percent de-dollarization in the country. But the lion's share of savings in the portfolio should be in the national currency, this is also logical and understandable.

Therefore, "Nomad Gold" is suitable for those who prefer to keep savings in dollars, especially now, when the tenge is weakening.

- I would say that accumulative insurance is great for those who try to diversify their portfolio. Therefore, I would have referred this product not to as a mass one, but for middle-income people and for VIP-clients. I believe that to insure your life and your family, you need to reach a certain level of development, grow internally and financially. Therefore, "Nomad Gold" is suitable for those who prefer to keep their savings in dollars, especially now, when the tenge is weakening.

However, there are prerequisites for the product to become massive. First, the minimum contribution for the opening of the accumulative insurance policy is $1,000. Secondly, as of end of this year and the beginning of the next year, the last three-year dollar deposits with an annual rate of 3% will be closed. Now the dollar deposit rates in banks do not exceed 1%, and people will look for an alternative. Thus, the customers will start flowing into the “Nomad Gold” product.

How did you organize a sales system with NOMAD LIFE?

- The product will be offered to customers in a combined version. On one hand, it can be sold in its pure form on the side of the partner. On the other, it can be sold by us.

Frankly speaking, NOMAD LIFE Company sells its product to customers without us. And the logic of our participation is that we start working with our client base. Also we will promote the product in smartphones through the application "Sberbank Online", so customers can buy insurance remotely.

What advice would you give to current and future customers?

- Diversify your portfolio and look more at various financial instruments. Although there are not so many of them on the market, it is worth using as many of them as possible. The use of different instruments, different currencies and different terms is a guarantee of stability.

Learn about the “Nomad Gold” program and leave a request on the website


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