The total portfolio of LICs on annuity insurance amounted to 33.2 billion tenge forming 24.85% of the total premiums of LICs. The fees amounted to 29.16 billion tenge in absolute terms. By the end of 2021, the insurance premiums under retirement annuity agreements reach the record 130 billion tenge having increased by 82.1% over the year. It is known that by the beginning of 2021, 61,000 people signed retirement annuity agreements with LICs. Given the annual growth in premium income, it can be assumed that by the end of the same year their number exceeds 100 thousand people.
“The observed growth in the retirement annuity segment is primarily due to the regulator’s support, whose initiatives, primarily in terms of deferred annuity and reducing the minimum sufficiency amount for concluding a retirement annuity agreement, plays a very important role,” says Nurlybek Tolykbayev, Deputy Chairman of the Board of LIC Eurasia.
The concept of further development of the retirement annuity market provides for the introduction of joint annuities. “This will reduce the cost of retirement annuity by having individuals (spouses or close relatives) pool their savings to purchase a joint annuity. Such a decision will, first of all, make the product even more accessible, and secondly, of course, it is taking care of a loved one,” the source continues.
For example, if one spouse does not have enough pension savings to buy an annuity in LIC, and the second has a surplus, then lifetime payments are provided to both of them through a joint retirement annuity. This innovation will give the pension annuity market a new impetus and make it even more attractive. “Retirement annuity (early pension) is a lifetime pension payment from a life insurance company. They are guaranteed for a lifetime. Even after the savings deposit is exhausted, the pensioner will receive a pension both at the age of 90 and at 100. In 2022, the sufficiency amount for concluding a retirement annuity for 55-year-old men was 7.1 million tenge, and for women aged 52,5 years - 9.5 million tenge. A deferred retirement annuity can also be purchased at the age of 45. A man needs to have at least 6.5 million tenge, and a woman - 8.1 million tenge to buy it. However, the payments will be made starting from the age of 55,” concluded Yelena Taytugoleva, Managing Director of Nomad Life.
Photos are from open sources.