LIC Halyk Life provided most payments in 2020 (9.7 billion tenge), which was 8.5% more than in 2019 (8.9 billion tenge). The company’s share in total LIC payments was 35.6%. Let us note that Halyk-Life is in the TOP-3 in terms of payments by all insurance companies, regardless of the insurance sector.
LIC Nomad Life (9 billion tenge) and LIC State Annuity Company (2.4 billion tenge) are also in the TOP-3 LICs by the amount of insurance payments. The share of insurance payments of the top three companies in total payments of LICs is 77.3%.
Insurance payments have grown by 71.8% for five years. Such progress is associated with the growing interest of the population in life insurance, as well as with the development of the endowment insurance and retirement annuity markets. LIC payments serve as an important indicator of their reliability, as life insurance companies provide products similar to bank deposits giving customers the opportunity to save money for education and retirement.
The main advantage of endowment agreements over bank deposits is insurance coverage.
The legislation allows an insurance company to cover its risks with another insurance company; it is usually a foreign insurance company with a high international rating. One insurer is reinsured with the help of another one. Thus, the coverage amounts under mainly term and in some cases endowment agreements also have indirect guarantees by international reinsurers.
Besides, now all life insurance companies, including the sector leaders, Halyk Life, Nomad Life and State Annuity Company, are members of the Insurance Payments Guarantee Fund under retirement annuity agreements and annuity contracts under the law on compulsory insurance of employees against accidents. There are no limits under such insurance agreements in contrast to the limits of up to 10 million tenge on bank deposits guarantees.
Photos are from open sources.
