Annuity insurance remains the main growth driver in the overall LIC portfolio. The volume of premiums for this class of insurance in annual terms increased by 124.4% (or by 32.4 billion tenge in monetary terms), to 58.5 billion tenge in October. As of early November 2019, the share of annuity insurance premiums was 37.3% of the total premiums collected by LICs.
However, life insurance remains the leader in premiums in monetary terms. The fees of LICs amounted to 59.7 billion tenge showing a serious increase of 47.5% in October. Life insurance occupies 38% of the overall portfolio of LICs. All companies operating in the life insurance sector showed a positive trend in premiums.
LIC Standard Life showed the maximum dynamics of 887.4%, having collected 706.1 million tenge. The company increased its presence in the segment to 1.2%. State Annuity Company (SAC) demonstrated growth of 359.5%, collecting 1.8 million tenge. Nomad Life was the third LIC in terms of premiums, it increased fees by 75% to KZT 9.8 billion (year-on-year). The company occupies 16.4% of the life insurance market share.
LIC Halyk life is a leader of the segment. The company's portfolio grew by 29.8% to 29.7 billion tenge in annual terms. Good fees allow Halyk life to take 49.7% of the life insurance market. The second major LIC in the life insurance segment is the European Insurance Company (EIC). It has collected 17.9 billion tenge increasing portfolio in annual terms by 67.8% in October and occupies 30% of the life insurance market. Three LICs: Halyk life, EIC and Nomad Life form over 96% of the life insurance market.
In October 2019, the total fees of LICs in the annuity insurance and retirement annuity segments amounted to 58.5 billion tenge and 53.3 billion tenge, respectively. Premiums on retirement annuities grew in annual terms by 160% or by 32.8 billion tenge. All companies operating in the annuity insurance and retirement annuity segments showed a positive revenue result.
LIC Nomad Life is a leader of both segments with a market share of 48% for annuity insurance and 48.8% for retirement annuities. The annuity insurance portfolio of LIC Nomad Life in absolute terms is 28 billion, an increase of 151.8% (year-on-year), and the retirement annuity portfolio is 26 billion tenge, an increase of 203.5% (year-on-year).
The second major player in the annuity and retirement insurance segment LIC Halyk life occupies 36.3% of the annuity insurance segment and 35.6% of the retirement annuity segment. The company increased the premiums on retirement insurance by 96.5% to 21.2 billion tenge, and on retirement annuities by 115%, to 19 billion tenge (year to year). The third major segment player LIC Standard Life occupies 9.4% of the annuity insurance segment and 9.8% of the retirement annuity segment. The company's premiums in annual terms have increased by 118.4% and 142.2%, respectively. The portfolio of LIC Standard Life on annuity insurance reached 5.5 billion tenge, and on retirement annuities - 5.2 billion tenge.
It is worth noting the impressive growth of LIC Freedom Finance in the annuity insurance segment which has increased premiums by 730.8% to 1.6 billion tenge (year to year). In the retirement annuity segment the company’s premiums increased by 5921% to KZT1.5 billion by the end of October, 2018 making the company a growth leader in this segment. This index allowed Freedom Finance Life to move to the fifth place in terms of assets among LICs.
According to the results of October 2019, the premiums in Employer Liability Annuities class (ELA) showed a negative trend of 0.2%, while in September the premiums grew compared to the results of the same period in 2018. The total portfolio of LICs in this segment amounted to 4 billion tenge, occupying 2.6% in the total premiums of LICs.
All companies operating in this segment, except for Halyk life, showed negative growth. The positive fees of 49.2% allowed the company to increase its portfolio to 1.6 billion tenge and occupy 39.9% of the market. Another large portfolio in the amount of 1.58 billion tenge is held by LIC Nomad Life, which occupies 38.8% of the ELA market. The State Annuity Company (SAC) is one of the three largest ELA insurers. In October, it collected 456.7 million tenge, and occupied 11.2% of the market.
The class of other types of annuity insurance continued to reduce the portfolio as of end of October 2019. The fees have decreased by 29.4% to 1 billion tenge compared to the same period last year. The fall holds share of other annuities in the total premiums of LICs at extremely low levels of 0.006%.
In October 2019, the accident insurance premiums collected by LICs fell to 10.4% in annual terms, to 7.9 billion tenge. Three LICs showed a positive trend in premiums, two - negative. LIC Standard Life has the maximum increase in premiums of 623.2%. LIC Nomad Life increased premiums by 486.9%. LIC Halyk life has grown in premiums by 13%, which does not prevent it from remaining the leader in the AI segment. The portfolio of LIC Halyk life in this insurance class is 4.5 billion tenge, but its market share has dropped to 57.2% due to the growth of shares of other companies. The second major LIC in this insurance segment EIC with the portfolio of KZT2.8 billion increased its market share to 35.4% of the market. Two LICs Halyk life and EIC form 92.6% of the market slightly reducing it.
The health insurance portfolio (VHI) in view of LICs continues to shrink. According to the results of October 2019, it has decreased by 70%, to 15.7 million tenge compared to the same period in 2018.
The premiums on VHI are collected by three LICs. The segment leader is LIC Standard Life with the premiums of 9.59 million tenge. It increased the premiums in October (year-on-year) by 63.9%. The company expanded its share in the segment to 60.9%.
The second large life insurance company Freedom Finance Life also increased premiums (by 13.1%) collecting 5.48 million tenge and thereby raised the market share in the VHI segment to 34.83%. The premiums of the third market player LIC Halyk life dropped by 98.4% compared to last year to 675 thousand tenge. The company retains a market share of 4.28%.
In the class “Worker accident insurance while performing labor duties” (CAI), growth continued. According to the results of October 2019, CAI premiums increased by 12.6% compared to last year's results, reaching 30.6 billion tenge. As of start of November 2019, CAI premiums occupy 19.5% of the total premiums of LICs.
During the reporting period, three LICs collecting premiums under CAI have increased revenue, and their growth is higher than the market growth. Two LICs have reduced premiums.
Halyk life has the largest portfolio of 9.8 billion tenge (32.2% of the CAI market) even taking into account a decrease in premiums of 21.8%. LIC Nomad Life is next, it increased premiums by 15.6% collecting 9.3 billion tenge, and occupies 30.5% of the CAI market. LIC Standard Life is the third largest insurer in the CAI segment. The company showed the best dynamics of premiums in annual terms (64.5%) collecting 3.77 billion tenge, and occupies 12.3% of the CAI market.
In October 2019, the total assets of LICs showed a high growth compared to last year, rising by 30.7%, to 409 billion tenge. The insurance reserves increased by 28.2% to 323.3 billion tenge. The consolidated profit of LICs grew by 31.1 8%, up to 17.1 billion tenge. The largest LICs are Halyk life and Nomad Life, which account for 72% of all LIC assets. At the end of October 2019 (year-on-year), Nomad Life showed the maximum asset growth of 54.8%. The assets of LIC Halyk life grew by 21.3%.
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