Life insurance companies (LICs) concluded 18,058 annuity contracts in the 1st HY 2024. For comparison: in the first six months of last year, LICs concluded 6,416 annuity contracts. The growth in premiums also fell slightly short of threefold with annuity premiums increasing from 53.7 billion tenge in the 1st HY 2023 to 142.5 billion tenge in the same period of 2024.
Retirement annuity insurance is a LIC product that allows UAPF depositors over 55 years of age to start receiving pension before reaching retirement age (subject to sufficient pension savings). Unlike UAPF pension, payments from LICs are made for life. Retirement annuity insurance class is subdivided into types: retirement annuity and joint retirement annuity. In turn, retirement annuity is also divided into subtypes: retirement annuity and deferred retirement annuity.
Retirement annuity contracts work under almost identical conditions in all life insurance companies. “The conditions are uniform, since retirement annuity operates on the basis of the Social Code of the Republic of Kazakhstan," they explain at the Eurasia Life Insurance Company.
In practice, all or almost all life insurance companies offer clients the same rates: indexation rate of 7%, rate of return - 8%. According to one of the market participants, who wished to remain anonymous, so far “there are enough clients for all life insurance companies and there is no great need to create different conditions between life insurance companies.”
The leaders in terms of collected premiums on retirement annuity contracts for the 1st HY 2024 were Halyk-Life (52.95 billion tenge), Nomad Life (41.32 billion tenge) and Freedom Life (26.2 billion tenge).
The two companies, which together collected more than half of the premiums under annuity contracts for the first half of the year, are confident that the choice of clients, all other things being equal, is based on trust.
“A reliable and recognizable brand inspires confidence and a sense of security in clients, which is especially important in the insurance industry. The brand and stable financial performance play a key role in forming first impressions and making a final decision,” says Zhanar Zhubaniyazova, Halyk-Life.
“Considering the long-term nature of retirement annuity, clients strive to choose the most stable company so as not to worry about their savings in the future. Although the integrity of savings is guaranteed by the IPGF, when choosing a long-term partner, clients are guided by the company's experience and financial performance," the Nomad Life press service comments.
Life insurance companies do not have the right to use bonuses to attract clients. "Due to the fact that retirement annuity is a social type of insurance, it is prohibited to pay agency commissions and pay bonuses and rewards to policyholders," they explain in Nomad Life. The examples of unfair competition, however, still exist; there are companies on the market that offer generous bonuses when concluding a retirement annuity agreement.
Source: http://kz.kursiv.media/2024-08-22/print1048-klmh-annuitet/
Photo courtesy of public sources
