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"Life insurance is socially important; it is care for loved ones"

In an exclusive interview with our publication, Gulmira Ubegaliyeva, the Board Chairman of Eurasia LIC JSC, told about the company’s plans in the life insurance market of Kazakhstan, gave her forecasts for the industry development, expressed her opinion on what is exactly needed for that, and also presented a customer profile of insurance companies in our country and West.
"Life insurance is socially important; it is care for loved ones"

- Gulmira Kairullovna, how did your shareholders decide to create a LIC? What factors influenced that?

- The decision to create Eurasia LIC, the subsidiary of Eurasia IC, is due to plans for the global expansion of the insurance product line. The main task of the company for this and the following years is to use the experience and authority of Eurasia IC, the leader of the Kazakhstani insurance market, to create a competitive product line and high-quality service in the life insurance market. We believe that in the next 5 years, the macroeconomic situation in Kazakhstan will be favorable for increase in demand, and the life insurance market will be one of the most dynamic in the financial industry in the nearest future.

As we stated in March, the company's charter capital amounted to 5.4 billion tenge meeting the requirements for the size of capital under the Law of the Republic of Kazakhstan “On Insurance Activity” in the “life insurance and reinsurance” sector. Within the framework of this industry, LIC Eurasia plans to carry out activities for all insurance classes under a license for the life insurance industry.

- It is no secret that for the last year or two the interest of investors in the development of LICs in Kazakhstan has noticeably increased. In your opinion, what is the reason for that? Thus, according to expert opinion and statistics data the assets of Kazakhstani LICs are increasing, that is, it is a business that brings real profit and grows.

- Digitalization is gradually conquering the insurance market. More and more insurance products are being sold online, remote loss adjustment services are being developed, and new insurance products are being offered.

A few years ago, it seemed incredible that in the foreseeable future life insurance would be in demand. But given that there are now seven life insurance companies on the market, this industry is paying off. The life insurance segment, which for a long time has remained on the periphery of the insurance market’s attention, has made a quantum leap over the last 5 years: today it is in the spotlight of the companies, regulator and media, which is very pleasing. We assume that life insurance will be growing by 10-15% annually, otherwise the Eurasia insurance company would not have established.

Now it can be said that the life insurance industry in Kazakhstan is in the active phase. For its further successful development a number of components are required, the most important of them is the internal standard of the industry.

In fact, we believe that for the life insurance growth in Kazakhstan the requirements should not only be provided for the life insurance product itself, but the sales process as well. There should be uniform rules for information disclosure; the sales process should be transparent. For that, the agents must be well trained perhaps even licensed, a point system for seller qualification assessment should be developed; at the moment this primarily concerns the main products, and then extends to all the rest.

For further active development of the life insurance market, the participants should be responsible fulfilling their obligations before policyholders. The market growth directly depends on customer satisfaction. For instance, we see a great customer interest in life insurance products by requests that come to our company’s website and phones. This is due to increase in the number of clients who want to provide themselves and their families with financial protection in case of unforeseen life situations.

Given the growing interest of our people in life insurance in attempt to protect and improve their lives now and in future, we are confident that we can offer unique products and high quality services that fully meet the requirements and needs of customers. The customers of Eurasia IC have already been able to ascertain the high quality of the services provided by the company for over 20 years. Next in line are the clients of the Eurasia LIC. We want to move on, and our goal is to make customer’s life easier.

- How do you personally assess the development of the life insurance market in Kazakhstan? What are its strengths and weaknesses, in your opinion? And what are the growth prospects?

- Today, the leadership is determined by the process automation, change implementation speed and the company’s ability to adapt to new trends, work with innovative solutions and operational efficiency. After all, everyone knows that the requirements for insurance companies are growing every year, both from the regulator and customers. Those who survive this race and are able to change the model of interaction with the client, will achieve good results.

It is no secret that the life insurance market is drawing a close attention nowadays. This was not the case 5 years ago. Therefore, we can safely take the track where the market growth dynamics can repeat the model of many emerging markets: the growth based on bank insurance, after which the development of innovative products begins at the junction of the deposit, investment, pension and insurance markets.

In the near future, life insurance as a voluntary type of insurance with the right approach can even outrun some types of general insurance; it will be a completely deserved and natural trend. We are confident that the life insurance market will grow; by 2025 our market has all the prerequisites to the growth by 30-40% annually.

Both key life insurance products compulsory accident insurance (CAI) and endowment will develop. The main changes in the product line this year will concern the saturation of our products with the service component. This is our added value in negotiations with our partners.

Initially, life insurance was considered a product for wealthy customers. Today we have offers for mass retail available on the market with the minimum contribution amount from 10,000 tenge.

Life insurers are interested in developing the pension market, including the non-state pension schemes. Insurers will be able to solve a wider range of issues - not only saving, but also family income coverage in difficult life situations.

- What tasks for the company’s development have you set in the next 1-2 years? What work is done by your company now? Which cities will it be presented in? What market share does your company plan to take and what features of services is it going to offer to Kazakhstanis?

- The prospects of Eurasia LIC are quite obvious: there is an opportunity to occupy a market share while it is still at the stage of relative formation and has not reached saturation, besides along with the classic types of insurance we are witnessing an excessive demand for innovative products today.

At this stage the LIC Eurasia is not going to focus on the financial group’s customers, by the end of the year our portfolio will consist of 70-80% of new customers. The decision to establish a life insurance company was a logical step in implementing the one-stop-shop business model adopted in the world, when a client can receive all services in one place. This will allow us to offer both existing and potential customers a full range of insurance services. Thus, the creation of a subsidiary structure of the Eurasia IC will open great opportunities for the successful development of joint cross-selling, which means a significant improvement in the customer service quality.

For example, we have already introduced a number of measures to combat misselling. In particular, we make after-sales calls to customers to clarify whether they have understood the key terms of the contract correctly, since it is important for us to make sure that the sale was of high quality, that the essence of the product is clear, etc.

Speaking directly, our company sets itself ambitious tasks: collecting premiums on all lines of business, while the company itself intends to get into top three. In addition, we plan to strengthen work in all directions including the regions. Such strategic objectives are dictated by our vision of the market condition, its growth prospects and assessment of our own potential. Working together with the general insurance leader, Eurasia IC, provides such ample opportunities as variety of distribution channels and cross-sales, and not realizing this means missing the historic chance to climb to the top. The company development will engage all channels: agency, partnership, corporate, regional. We also plan to work with market banks. We can provide a complex approach to large companies and their employees by offering both products for business and a personal insurance line including collective and individual programs. And, for example, small and medium-sized businesses can count on a careful touch considering their personal needs.

The task set by the company's shareholders is to be among the leaders of the life insurance market in Kazakhstan with a full-scale product line in record time. Plus, our team should be professional and open to new technologies. Besides, we constantly monitor the penetration of products, both insurance and investment savings, into the retail deposit base. This is an obvious criterion, as according to it we can assess the potential for further growth.

Our plans are quite ambitious; I think you will see everything in the very near future.

- If we compare the average profiles of your Kazakhstani client and customer of a large western insurance company, how will they differ?

- It would be difficult to make such a profile, but I will try.

If case with Europe, we are talking about a man of 30-60 years of age, with a higher education, family, stable profession; he may not take a leading position at work, but he understands that insurance is one of the vital expenditure items which he must allocate money for. Almost every family has at least medical insurance, but on top of that even several other policies. However, I repeat, a person does not necessarily earn so much money per month. Plus, insurers in the west have a different mentality, as they are ready to offer various bonuses to clients who take care of their health (practice of sports, smoking cessation, and so on). Almost all of their children are insured, and, for example, children’s education occupies a significant share in the family budgets. If adverse events occur to the parents (death or disability), the remaining contributions will be paid by the insurance company and the children will be provided.

As for Kazakhstan, these are mostly people who are the breadwinners in the family with income from a level slightly above average, often holding leading positions, that is, professionally and socially well off people, basically, at the age of 40 and above. It is great that people in Kazakhstan have been willingly insuring themselves and their children lately, because they realize that this is important. In fact, we slowly but surely should approach the indicators of the developed countries, where each family member usually has 2-3 different policies.

- Do you agree with the opinion that population of Kazakhstan among other things due to the growth of young generation and low rates on foreign currency deposits, has a high demand for saving products, safe investment instruments starting with small amounts? Have you studied this question? Are there any statistics on that? What interesting proposals in this connection would you like to offer to the people of Kazakhstan in the future? In your opinion, how can the demand for life insurance services and the level of insurance culture of the population in general be increased in Kazakhstan?

- Life insurance is socially important: it is care for loved ones, those who are next to you, who depend on you, your children, and yourself. Yes, this is a voluntary step, but it is worth it. And thus, Eurasia LIC wants to protect the comfortable lifestyle of Kazakhstani people under any circumstances with its services, as there can be various risks. There are deadly diseases, and it is necessary to urgently find money. We have such insurance. There are risks of disability. We pay money - please restore your health. The breadwinner is gone. Here is the money - spend it wisely. This is in terms of universal life insurance. Our programs are flexible, some people need maximum protection.

This year we plan to focus on the development of insurance solutions for the retail segment. We also expect growth due to boxed solutions, which are becoming increasingly popular among corporate clients. Nevertheless, we believe that the current drivers as life and accident insurance will be supporting the market.

The company will focus more on the development of additional services and quality than fundamentally new products. We will be actively developing competencies in the service component, as we believe that the main criteria when choosing insurance programs are the availability of life insurance products to all social groups, absolute transparency in calculating the premium, timeliness and ease of processing payments in case of insurance event occurance. 

- Thank you for your thorough answers. The best of luck to your company!

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