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LIC - a good year start

Life insurance companies (LICs) begin a year on a positive note. In January, insurance premiums increased by 34% (by 3.1 billion tenge) to 11.9 billion tenge compared to the same period of 2018. The insurance payments increased by only 0.3%, from 1.47 billion to 1.5 billion tenge, helping companies keep expenses at a comfortable level.
LIC - a good year start

Life insurance actually doubled the premiums, collecting 5.1 billion tenge compared to 2.7 billion in January, 2018. The growth was secured by contracts, the number of which increased by 62.7%, to 118.5 thousand units. Three companies LIC Halyk-Life (1 982 million tenge), LIC Nomad Life (1 536 million tenge), LIC "European Insurance Company" (1 533 million tenge) are leading with almost the same results. Three insurers form 98% of the life insurance market.

Insurance of an employee against industrial accidents (Compulsory Accident Insurance (CAI)) in January showed a decline in premiums, as the fees of LICs dropped from 3.1 billion tenge to 2.8 billion tenge (year to year). Almost all contracts related to direct sales, only 58.5 million tenge were received under internal reinsurance contracts. The maximum market share under the CAI agreements in Nomad Life was 40.6% (1,150 million tenge), Halyk-Life was the second with 36.5% (1,034 million tenge).

KZT 44.4 million were transferred to residents for reinsurance. Let us remind you that in the 2nd HY 2018, the legislative changes took place when the National Bank had limited the premium reinsurance to the LICs on non-life insurance.

Annuity insurance for the calendar year has increased by 78%, from 1.9 billion tenge to 3.4 billion tenge. The number of insurance contracts increased to 374 against 276 contracts in January 2018. Retirement annuities provided the dynamics. Their sales doubled, from 1.5 billion tenge to 3 billion tenge. In January 2019, 219 insurance contracts were concluded against 110 contracts a year earlier.

The cost of the retirement annuity for men in the calendar year did not increase much amounting to 9.8 million tenge by the beginning of February 2019, a year earlier the cost was 9.6 million tenge. The retirement annuity cost for women, by contrast, has become cheaper: 13,427 thousand tenge, against 13,476 thousand tenge for the same period of 2018. The reason is a gradual increase in the retirement age for women.

It should be noted that the growth in retirement annuity premiums was accompanied with activity of depositors to the UAPF. In January 2019, future retirees transferred 2.6 billion tenge from the pension fund to LICs, although a year ago the withdrawals from the UAPF were more modest, 1.3 billion tenge. The absolute leader in the retirement annuity segment in January was Standard Life Insurance Company. It collected 2 billion tenge premiums, closing 69% of the market.

Premiums on annuity contracts entered into within the CA Insurance were also marked by growth, although not as impressive as pension annuities. Fees amounted to 321 million tenge instead of 305 million a year earlier. The number of concluded insurance contracts increased from 100 to 122, and legal entities were the main object of insurance.

The market of CAI annuities is divided between the two largest life insurance players. Together they collect 88% of premiums. In January, LIC Halyk-Life collected 168 million tenge, Nomad Life - 118 million tenge.

The market segment on other types of annuities in January was the weakest link in the LIC activity. Fees fell from 167 million to 96.4 million tenge due to a reduction in the number of insurance contracts.

Accident insurance continues to be a stable activity for LICs. In January, 2019, the total premiums on accident insurance reached 958.5 million against 753.5 million tenge in January, 2018. It should be noted that the LIC share in accident insurance in January was 60.7% or 581 million tenge in absolute figures.

It is important to note the change in the accident insurance contract structure. In January 2019, the number of insurance contracts was reduced to 39.8 thousand instead of 84.4 contracts for the same period of 2018. The reduction of number of contracts, however, was accompanied by their consolidation. The number of insured sites increased from 74.5 thousand to 440.7 thousand units.

Sickness insurance (VHI) is still a field of a relative interest for LICs. Only three companies have interest in VHI. In total, they collect 527 thousand tenge out of 6.5 billion tenge, which are related to general insurance premiums of companies. Standard Life has the maximum portfolio of voluntary health insurance among LICs (505 thousand tenge).

In general, LICs feel confident in the market. Their assets increased by 19.2% to 329 billion tenge. The three largest LICs (Halyk-Life, Nomad Life, the State Annuity Company) form 82.6% of premiums.

Photos are from open sources. 

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