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Crisis is not an obstacle

For the first five months of 2020, LICs have slightly been low in revenue, but built up the assets and equity.
Crisis is not an obstacle

According to the results of five months of 2020, the increase in gross premiums of LICs for the first time in several years turned out to be negative. The collected premiums in the amount of 70.2 billion tenge were 1.2% less compared to the results of the same period in 2019. The life insurance sector managed to maintain a positive trend in premiums. In annual terms, the segment has grown by 4.1%, to 27.5 billion tenge and occupies 39.1% in the aggregate premiums of LICs against 37.2% a year earlier. Halyk life retains the maximum portfolio of life insurance premiums of 11.2 billion tenge. According to the results of five months of 2020, the company’s life insurance premiums decreased by 9.2% (year-on-year), due to which the market share of Halyk life in total life insurance premiums dropped to 40.8%.

LIC Nomad Life holds the second position with the portfolio of 7.8 billion tenge. The dynamics of its premiums of 47% in May turned out to be much higher than the market growth rate and allowed increase the life insurance market share to 28.6% against 20.3% in May 2019.

LIC European Insurance Company (EIC) holds the third position. The LIC portfolio decreased by 17.7% to 6.4 billion tenge and made 23.5% in total premiums on life insurance against 29.7% a year earlier. The high annual dynamics of premiums in 1563493.3% of LIC Eurasia should be noted. In monetary terms, the LIC portfolio is 938.1 million tenge, the company occupies 3.4% of the life insurance market share.

Over the five months of 2020, annuity insurance collected KZT21.99 billion, falling in premiums by 22.6% compared to the results of the same period in 2019. The fall reduced the market share of annuities in total premiums of LICs to 31.3%, from 39.9% a year earlier; it brought the life insurance segment with a share of 39.1% in total premiums of LICs to the dominant position in the life insurance industry.

According to the results of five months of 2020, the retirement annuities, part of annuity insurance, came up short by 22.3% of fees compared to the end of 2019. The LIC portfolio on retirement annuities amounted to 20.1 billion tenge. Four out of five LICs concluding retirement annuity insurance contracts experienced a decrease in premiums, and only one had an increase. LIC Freedom Finance Life raised its portfolio by 4339.1% to 2.1 billion tenge by the end of 2019. The company occupies 10.5% of the retirement annuity market against 0.2% a year earlier.

LIC Nomad Life is a leader of the annuity insurance and retirement annuity sector. The company's premiums on annuity insurance rose to 8.5 billion tenge, and retirement annuities - up to 8 billion tenge. LIC Nomad Life forms 38.8% of the annuity insurance and 39.8% of retirement annuity segment. Halyk life is the second in terms of portfolio size. It collected 5.4 billion tenge in the annuity insurance and 4.7 billion tenge in retirement annuity class. The market share of LIC Halyk life in the annuity insurance class is 24.7%, in retirement annuity class 23.6%. LIC Standard Life is in the third place. The LIC’s fees amounted to 3.6 billion tenge on annuity insurance and 3.5 billion tenge on retirement annuities. LIC Standard Life occupies 16.5% of the annuity insurance segment and 17.5% of retirement annuities.

The premiums in the class “Employer Liability Annuities” (ELA) in May 2020 sank by 32.7% to 1.3 billion tenge compared to the end of May 2019. Only two of six LICs collecting ELA premiums showed a positive trend.

LIC Eurasia increased premiums by 80655.1% bringing the portfolio to KZT165.5 mln and thanks to the breakthrough made to the third position in the segment with a market share of 12.4%. The premiums of LIC Freedom Finance Life have grown by 120.9% (year-on-year) to KZT122.4 mln, and the company holds 9.2% of the ELA segment. LIC Halyk life with a portfolio of 389.3 million tenge and LIC Nomad Life with a portfolio of 331.2 million tenge remain the largest players in the ELA segment. According to the results of May 2020, LIC Halyk life occupies 29.1% of the ELA segment, and LIC Nomad Life holds 24.8%.

As of May, the “Other types of annuity insurance” segment grew by 4.7% compared to the same period last year, to 533.9 million tenge. Two companies determine the fee dynamics. LIC Halyk life raised 290.8 million tenge (occupying 54.5% of this segment). LIC Nomad Life got 195.8 million tenge (making 36.7% of the segment). The leaders form 91.1% of the Other Annuities segment. The third significant player is LIC Freedom Finance Life. According to the results of five months of 2020, the company's portfolio amounted to KZT 45.7 million occupying 9.6% of the segment.

According to the results of May 2020, the premiums for accident insurance (AI) collected by LICs amounted to 5.9 billion tenge showing an increase of 76.7% compared to the same period in 2019. In total portfolio of LICs, the share of such premiums grew to 8.4% against 4.7% a year earlier. Four of six LICs collecting premiums on AI showed a decrease, and two showed an increase. LIC Nomad Life showed the maximum increase in premiums in 4257.2% increasing the portfolio to KZT106.7 mln. The premiums of LIC Freedom Finance Life grew by 609.1% (year-on-year) to 1.16 billion tenge. The company is in the top three occupying 19.5% of the AI segment among LICs. KM Life Insurance Company is in the first position with a market share of 29.6% having attracted 1.7 billion tenge. Halyk life holds the second position with a share of 27% having collected 1.6 billion tenge of premiums. The segment concentration continues to decline in comparison with the end of last year. If in May 2019 the two largest portfolios contained 94.6% of the premiums, in May 2020 the three largest portfolios covered 76.1% of premiums.

The VHI premiums among LICs in May 2020 kept high rates and grew by 10,812.8%, to 652.2 million tenge compared to the end of 2019. LIC KM Life made the main contribution to the segment growth.  As of early June 2020, its portfolio in the segment amounted to 642 million tenge, or 98.4% in total premiums on voluntary health insurance among LICs.

The premiums in the segment “Employee Accident Insurance in the Performance of Employment Obligations” (CAI) in May 2020 showed an increase of 10% (year-on-year) up to 14.1 billion tenge. The segment is taking up more and more volume in total premiums of LICs. If in May 2019, the premiums were 18%, then a year later - already 20% of total premiums of LICs.

LIC Nomad Life is a segment leader in premiums; the company has collected 3.8 billion tenge and occupies 27.1% of total premiums on CAI. Halyk life is in the second place having collected 3.1 billion tenge and occupies a 22.2% share in the segment.

LIC Standard Life remains the third largest insurer in the CAI segment, its portfolio is 1.89 billion tenge, and the market share in the segment is 13.4%. KM Life Insurance Company is quickly catching up with it; the company’s premiums amount to 1.85 billion tenge, and the market share in the segment is 13.1%.

The process of reducing the premium concentration continues in the CAI sector. According to the results of May, the three largest LICs collected 62.7% of premiums, while a year ago the leaders accumulated 79.9% of total premiums on CAI.

According to the results of May 2020, the total assets of LICs amounted to 515.8 billion tenge showing an annual growth of 43%. The insurance reserves made 360.8 billion tenge increasing by 23.8%. The LICs’ equity of LICs increased by 57.4% (year-on-year), to 93.3 billion tenge.

Photos are from open sources.

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