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State Annuity Company shows growth

The sole shareholder of JSC LIC State Annuity Company made the decision to pay dividends as of 2018. In difficult market conditions, a life insurance company with a state participation has been demonstrating a positive financial result for several years in a row. The company has increased the state budget by almost 1 billion tenge in the form of dividends over the past three years.
State Annuity Company shows growth

Last year, JSC LIC SAC replenished the state budget by 500 million tenge. And in 2018, the company made a profit of more than 864 million tenge, and more than 346 million in dividends will be received in the income of the state budget.

Besides, the company's payout rates in 2018 exceeded two billion tenge; 800 million of them were under annuity insurance within the framework of compulsory accident insurance, and more than 1 billion tenge - under pension annuity agreements.

Over the past three years, the company's assets have increased by 5 billion tenge, insurance reserves - by 4 billion tenge. The total amount of payments under contracts concluded within the framework of compulsory insurance of workers harmed at work, and retirement annuity, is over five billion tenge.

Meanwhile, the deputies of the Senate of Parliament have announced that only two joint-stock companies in Kazakhstan are working with profit. Twenty-seven state joint-stock companies ended the year with a loss of almost 1.5 trillion tenge; five of them – with more than 500 million tenge, said Olga Perepechina, the Head of the Committee for Finance and Budget of the Senate. However, the companies with such losses paid premiums. The senators asked the Ministry of National Economy to figure out the reasons, reported Tengrinews.kz.

SAC was established in December 2004. The rights of ownership and use on the state-owned stake of the company belong to the Ministry of Labor and Social Protection of population of the Republic of Kazakhstan. Previously, the company was to be transferred to the competitive environment by the end of 2018. However, on December 26, 2018 at the meeting of the State Commission for Modernization of the Economy of Kazakhstan it was decided to exclude it from the list of objects for privatization. This was requested by the deputy of the Majilis Murat Temirzhanov in his official request to the Prime Minister of the Republic of Kazakhstan. The market participants represented by its leaders also appealed to the leadership of the National Bank and the State Property Committee with a request to consider the possibility of preserving JSC SAC with state participation as a stabilizing participant in the life insurance market.

At that time, the size of the company's assets reached 37 billion tenge, equity capital rose to 5.6 billion tenge, insurance reserves - to 31 billion tenge. From the beginning of the year of 2018 the insurance payments amounted to over 2 billion tenge, and insurance premiums reached 3.8 billion tenge. “A high financial performance of the company testifies to its success and stability in the market,” the company said.

Deputy Temirzhanov acted primarily from the position of the company's strategic importance for people of Kazakhstan. According to him, over 10 thousand people receive insurance payments from SAC, about 86% of them have bought pension annuities, purposefully selected a company with state participation from seven existing insurance organizations on the market today, the rest are injured employees or dependents of employees killed on duty.

There were also concerns that the value of the company could be reduced following the auction results, and in the absence of potential buyers, it would be completely eliminated. In that case, it would be difficult to determine or even predict the future of beneficiaries of social insurance settlements.

As a result, you can bring the opinion of SAC colleagues, Kazakhstani life insurance companies. As they believe, the state market participant sets the trend in the most socially important areas, can cover risks that for some reason have dropped out of the system and remained uncovered (regressors, liabilities of bankrupt enterprises, etc.). It is important to have a state insurer for the implementation of state programs, social reforms in the field of life insurance, etc., they emphasize.

One of the most important arguments announced by companies is the use of SAC in the insurance payment guarantee system; the privatization of the state participant would lead to a revision of the entire guarantee system that, during the formation of the life insurance industry, would result in a substantial and unjustified increase in market costs, and as a result decrease in the industry solvency.

Therefore, the deputy and market participants insisted on the possibility of maintaining the company with state participation as a stabilizing participant in the insurance market. This, as noted by the people's representatives, will ensure the interests of annuities and keep the financial market stable.

As we can see, the life insurance company with state participation continues to show successful work results.

Let us remind you that the main tasks of SAC are to ensure the maximum coverage of workers with the system of compulsory insurance of an employee against accidents during the performance of professional duties and insured in various regions of the country on annuity insurance, ensuring the provision of advisory services to the population on insurance issues, promoting state development initiatives in insurance market.

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