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Dynamics of the life insurance sector is getting aligned

The fall in premiums among LICs slowed down in February 2022.
Dynamics of the life insurance sector is getting aligned

The total gross premiums of LICs in February 2022 reduced the rate of their decline. If the premiums fell by 25.1% in January in annual terms, in February they dropped only by 20.4%. LICs collected 49.6 billion tenge in absolute terms, including the cumulative part of the insurance premium on the Unit-linked product, which amounted to 1.96 billion tenge in February.

According to the data by the National Bank of the Republic of Kazakhstan, at the end of February 2022, LIC Nomad Life is a leader among LICs in terms of collected premiums (16.78 billion tenge), including unit-linked sales, the company's market share in the life insurance industry with unit-linked sales is 33.8%.

In February, the dynamics of premiums in the life insurance segment improved significantly. The growth was 47.9% (yoy) against the January annual dynamics of 11.5%. LICs collected 25.3 billion tenge, the share of premiums in the life insurance segment formed 51.1% in the total portfolio of LICs.

LIC Nomad Life is still leading in the life insurance segment. The LIC increased fees by 54.2% in annual terms collecting 8.8 billion tenge of premiums and forming 34.8% of the segment. LIC Halyk life takes the second position having demonstrated the dynamics of collections of 29.8% (year-on-year) and collected 8.5 billion tenge. The company’s share in the segment is 33.6%.

LIC European Insurance Company (EIC) remains the third largest insurer in the life insurance segment. The company’s premiums increased by 33.1% to 4 billion tenge in annual terms as of end of February, occupying a 16.2% share in the life insurance segment.

According to the results of February 2022, annuity insurance continues to be in the red deepening the fall. The fees decreased by 61% in February against a fall of 57.1% in January (yoy) in annual terms. Of the eight LICs collecting annuity premiums, only two LICs, KM Life and Centras Kommesk Life, have been showing positive dynamics for the second month in a row. The total portfolio of LICs on annuity insurance amounted to 12.5 billion tenge making 25.2% in total LIC premiums against the Januray share of 52.9%.

The collection of premiums on retirement annuities dropped by 65.3% compared to the same period in 2021. The fees amounted to 10.75 billion tenge. Based on the results of February 2022, LIC Nomad Life remains the leader of the annuity insurance sector and the segment of retirement annuities. It collected 4.2 billion tenge of annuity insurance premiums, including 3.97 billion tenge in the retirement annuity segment. LIC Nomad Life increased its market share to 33.7% in the annuity insurance segment and to 36.9% in the retirement annuities segment. The second largest portfolio in annuity insurance in the amount of 3.74 billion tenge belongs to LIC Halyk life (29.9% of this insurance segment). The LIC collected 3.2 billion tenge on retirement annuities and formed 29.9% of the segment. The third position is occupied by LIC Freedom Finance Life. In the annuity insurance segment, it collected 1.99 billion tenge (the segment share increased to 15.9%) and 1.5 billion tenge in retirement annuities (the segment share grew to 14%).

The collection of premiums in the Employer's Liability Annuities (ELA) class at the end of February 2022 decreased significantly compared to January. The annual dynamics was 5.3% in February against an increase of 24.6% in January (compared to the same period in 2021). The premiums amounted to 849.7 million tenge in monetary terms. Five out of eight LICs operating in this segment demonstrated positive dynamics in fees, four of them were higher than the market growth rate.

LIC Halyk life is still leading in the ELA segment. As of early March 2022, the LIC portfolio in the segment amounted to 285 million tenge, and its share decreased to 33.6%. LIC Nomad Life is the second. The company's portfolio was 223.2 million tenge or 26.3% of the segment's total premiums. As a result of February, LIC KM Life with a portfolio of 108.2 million tenge (12.7% of the segment) returned to the top three ELA insurers surpassing LIC Eurasia, which collected 100.1 million tenge of premiums and made 11 .8% of the ELA segment.

The “Other types of annuity insurance” segment showed an increase of 173.4% in February 2022 compared to the same period in 2021, to 904.9 million tenge. The structure of leading segment insurers changed again in February. LIC Freedom Finance Life moved to the first place from the second, it collected 434.6 million tenge and increased its share in the segment to 48% (33.4% in January). LIC Halyk life moved up to the second place from the third by getting 238.7 million tenge and forming 26.4% of the segment (26.9% in January). The January leader LIC KM Life went down to the third place with 203.1 million tenge and a 22.4% segment share (34.7% in January).

Accident insurance (AI) premiums collected among LICs fell by 63.9% as of end of February 2021. Three LICs showed a positive dynamics in fees, four - a negative one. LICs collected 1.4 billion tenge in total.

LIC EIC remains the segment leader having collected 521.1 million tenge, increasing its segment share to 35.7%. LIC Freedom Finance Life holds the second position in the segment having collected 492 million tenge and reducing its segment share to 33.7%. LIC Halyk life took the third position with a portfolio of 248.2 million tenge, it reduced its share in the segment to 17%.

The premiums in the sector “Insurance of an employee against accidents in the performance of their labor duties” (CAI) increased by 18.8% in annual terms in February 2022 against an annual growth of 15.2% in January exceeding 7 billion tenge.

Five LICs showed an increase in premiums, three LICs showed a decrease. LIC Nomad Life is still a leader of the CAI segment. The company’s portfolio amounted to 1.69 billion tenge in absolute terms occupying 24.1% of the segment. LIC Halyk life is in the second place with a portfolio of 1.58 billion tenge, it makes 22.6% of the segment.

According to the results of February, LIC Eurasia returned to the CAI top three. It took the bar of 1 billion tenge of premiums and made 14.3% of the segment surpassing LIC KM Life with a 12.3% share in the segment.

Health insurance premiums (VHI) in terms of LIC collection in February 2022 in annual terms increased by 101.9% against an annual growth of 24.5% in January. Four out of five LICs collecting premiums showed positive dynamics, with two LICs outperforming the market. LIC KM Life remains the largest insurer. The company collected 1.2 billion tenge of premiums in February but, nevertheless, reduced its share in the segment to 91.8% against 94.9% in January due to an increase in portfolios of other LICs.

At the end of February 2022, the total assets of LICs increased by 26.9% (year-on-year) to 791.2 billion tenge. The insurance reserves grew by 26% in annual terms exceeding 563 billion tenge. The equity capital of LICs increased by 19.8% (yoy) amounting to 137.3 billion tenge.

Photos are from open sources.

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