LIC Centras Kommesk Life, a subsidiary of one of the country's successful financial holdings, received a license in April 2020. The organization will focus on strengthening its own brand and increasing awareness in the near future. “When developing a product line, we primarily target on the client’s needs, that is, product values, service quality and convenient communications. We plan to further promote endowment life insurance products for the mass and premium client segment, retirement annuity, investment programs, integration with partners to expand the reach of the client audience,” emphasizes Gulzhan Dzhaksymbetova, the Board Chairman of Centras Kommesk Life.
The client base of Halyk-Life as of end of last year exceeded 1.3 million people. The main focus is on increasing the market presence through improving the financial literacy of the population and development of endowment life insurance. “Besides, for us, as for any business, taking into account the realities of today, an important development area is the business digitalization. The first steps have already been taken in previous periods. The next step is to expand the list of insurance products available to our customers online, which will expand the coverage with life insurance services. We will be developing new types of insurance, which are expected to appear this year, for example, endowment life insurance in favor of children subsidized by the state. We will be actively studying and implementing the Big-data possibilities. As, thanks to the “Data Factory” it is possible to speed up interaction with customers, automate communication and create the most profitable offer quickly,” says Zhanar Zhubaniyazova, the Chairman of the Board of Halyk-Life.
Freedom Finance Life will focus on selling retirement annuities and endowment insurance products. “Our endowment life insurance programs are becoming available for online conclusion, easy to pay, more flexible in terms of insurance payouts. Under the new Freedom First program, it is possible to conclude an agreement without leaving home, replenish it at any time and receive a partial payment during the accumulation period. The company pays special attention to the development of new products and convenient and technological services. In general, Freedom Finance Life will continue the development of online insurance,” says the company executive, Azamat Yerdessov.
Insurers’ forecast
The life insurance industry has great prospects, the market has been growing significantly in all key indicators recent years. Besides, LICs feel the regulator’s support in terms of introducing new investment products. “The loan growth, investment attractiveness of life insurance products, and improvement of customer service quality may become the growth drivers of LICs in 2022. Endowment and annuity insurance, which will remain among the most popular products, have the palm of victory. A promising program for the LIC market is unit-linked, investment life insurance, which is a combination of classic endowment life insurance with an investment component in the form of shares in financial instruments, when the insured himself participates in the distribution of investment income,” the Board Chairman of Centras Kommesk Life predicts.
Halyk-Life expects that laws allowing the launch of a new insurance product that will be of interest to young families with children will pass this year. It is endowment life insurance in favor of children subsidized by the government. The point of this product is that parents can insure their lives in favor of their child for education by concluding such an agreement and choosing a convenient amount of insurance premiums. But in addition to parents, the state will also subsidize such contributions in the amount of 5-7% annually. The main advantages of such a product over bank deposits are the availability of insurance coverage and insurance payment guarantee. For example, one of the parents opens a bank deposit in favor of his child in order to accumulate funds for education in the future. In case of the parent’s death or disability of group I, II, the money accumulated on the deposit may not be enough for the child’s education. However, when the parent concludes the insurance contract, the child will in any case be paid the full amount of tuition specified in the insurance contract. “We are confident that this product with proper coverage and communication to the population will be popular, - says the Halyk-Life executive. - In addition, we predict the growth of the compulsory insurance market for workers, given that the minimum wage has been increased to 60 thousand tenge since the beginning of 2022. Most likely, the retirement annuity market will grow slightly. But we do not expect active growth in this segment. This market has already shown significant growth in 2021 amid changes related to lower age and savings thresholds, so we do not predict significant growth this year.”
Azamat Yerdessov believes that this year the demand for retirement annuity policies, endowment life insurance, travel insurance, which includes the risk of hospitalization with a diagnosis of COVID-19, will grow. “As for endowment life insurance, the interest in these programs can be determined by several factors. We noticed that after the March devaluation, which had happened in 2020 due to the COVID-19 pandemic, people began to conclude agreements on endowment life insurance programs with indexation to the dollar in order to protect savings from depreciation of the tenge more often. For example, under the Freedom Capital program, one can both secure savings from devaluation and increase them significantly through an annual interest rate of up to 4% in dollars and 1.5% in euros,” the source emphasizes.
Impact of COVID-19
The successful results of the last two pandemic years have demonstrated that the life insurance market has adapted to the new working conditions during the pandemic, therefore, it is unlikely the pandemic will have a significant impact in 2022 either. “The pandemic, in some way, even prompted insurers to rebuild their business architecture, update their operation mode and interaction with customers, and develop digital products,” Gulzhan Dzhaksymbetova reminded.
Photos are from open sources.
