LICs continue to work on the growth dynamics of insurance premiums. According to the regulator reporting data, gross premiums of LICs in January-July 2020 increased by 6.2% in annual terms reaching 111.8 billion tenge. The life insurance sector keeps forming a positive trend in insurance premiums. In January-July 2020, life insurance premiums in annual terms increased by 9.2% to 43.9 billion tenge.
LIC Halyk life has the maximum portfolio of life insurance premiums. By results of seven months of 2020, it has reached 18.9 billion tenge, having lost 2.9% of premiums compared to the end of 2019. Downfall of premiums did not prevent LIC Halyk life from increasing its market share in the life insurance sector to 43.2%.
LIC Nomad Life takes the second position in the sector in terms of portfolio size. The company continues to generate strong dynamics of premiums. In July, the dynamics amounted to 70.3%, in annual terms, higher than the average market dynamics, ensuring the collection of premiums of 12.6 billion tenge. By the end of seven months of 2020, the share of Nomad Life in total life insurance premiums amounted to 28.9%.
The third position belongs to the LIC European Insurance Company (EIC). The dynamics of the EIC life insurance premiums was negative: by the end of seven months of 2020, premiums decreased by 23.5% compared to the same period in 2019. The portfolio reached 9 billion tenge, but the market share dropped to 20.7%. At the end of the six months of 2020, EIC accounted for 21.6% of total life insurance premiums of LICs.
A high premium dynamics of LIC Standard Life by 59%, up to 734 million tenge should also be noted. In January-July 2020, total life insurance portfolio of LICs formed 39.3% of the total LIC premiums against 38.2% a year earlier.
Annuity insurance for seven months of 2020 slowed down the decline in premiums. If in January-June the premiums fell by 10.7% in annual terms, the losses shrank to 4.8%. LICs collected 38.2 billion tenge of premiums in monetary terms. The share of annuity insurance in total premiums of LICs was 34.2% against 38.1% in 2019.
Retirement annuities, which are part of annuity insurance, have also reduced the negative dynamics of premiums. By results of first seven months of 2020, premiums on retirement annuities fell by 3.8% against an increase of 196.9% a year earlier.
The total portfolio of LICs on retirement annuities makes 35.1 billion tenge and accounts for 31.5% of total LIC premiums against 34.7% a year earlier.
LIC Nomad Life is an undisputed leader in the retirement annuity segment and annuity insurance sector. As of end of July 2020, LIC's annuity insurance portfolio amounted to KZT 15.1 billion, accounting for 39.6% of this segment. The portfolio of retirement annuities as of the same date makes 14.2 billion tenge, which is 40.6% of the retirement annuity segment.
LIC Halyk life is in the second place in terms of portfolio size. As of end of July 2020, the company collected 9.3 billion tenge of annuity insurance premiums (making 24.5% of this insurance segment) and 8.2 billion tenge of retirement annuities (making 23.3% of this segment).
LIC Standard Life ranks third among LICs in annuity insurance and retirement annuities. According to the results of first seven months of 2020, the portfolio of LICs in annuity insurance reached 5.2 billion tenge, occupying 13.7% of the segment, and 5 billion tenge – in retirement annuities, making 14.4% of the segment.
By results of first seven months of 2020, the premiums in the "Employer Liability Annuities" (ELA) class dropped by 21.5% by the end of 2019 to KZT 2.2 billion. Three of six LICs collecting ELA premiums showed positive dynamics of premiums, they are as follows: LIC Freedom Finance Life, Standard Life and Eurasia.
According to the results of first seven months of 2020, LIC Halyk life was ELA leader with the portfolio of 709 million tenge, occupying 31.6% of the ELA segment. LIС Nomad Life is in the second place with a portfolio of 613 million tenge, occupying 27.3% of the ELA segment. The third place is occupied by LIC State Annuity Company (SAC) with a portfolio of 228.5 million tenge, which is 10.2% of the ELA segment.
By the results of seven months of 2020 the segment “Other types of annuity insurance" became the only segment in the annuity insurance class that showed a growth in premiums. LIC premiums increased by 7.3% (year-on-year) to KZT 792.7 million. The collection of premiums in this segment is determined by LIC Halyk life, which has collected 449.4 million tenge of premiums and occupies 56.7% of this segment, and LIC Nomad Life, which has attracted
247.2 million tenge and occupies 31.2% of the segment. The share of leading companies in the segment is 87.9%.
LIC KM Life took the third place in the segment. The company collected 48.7 million tenge of premiums and occupied 6.2% of the segment's share in the first seven months of 2020. LIC Freedom Finance Life is the fourth significant player. The company’s portfolio in the first seven months of 2020 has amounted to 45.7 million tenge and makes 5.6% of this segment.
Accident insurance (AI) premiums collected by LICs continue to show strong growth. For first seven months of 2020, the aggregate premiums of LICs in this segment amounted to 7.8 billion tenge, 54.5% more than last year. For comparison, over the seven months of 2019, the LIC portfolio in AI has grown by 21.2%.
The maximum increase in premiums of 2332.4% (year-on-year) was shown by LIC Nomad Life, raising the portfolio to 152.9 million tenge. Another high growth in premiums (475.4%) was shown by LIC Freedom Finance Life.
LIC KM Life is a leader of the AI segment in terms of LIC premiums. In January-July 2020, the company attracted 2 billion tenge of premiums, which corresponded to a 26% share in the segment. These are neutral performance indicators compared to January-June 2020, when premiums amounted to 2 billion tenge with a market share of 28.6%.
LIC Halyk life is in the second place with a share of 25.5% collecting 1.99 billion tenge of premiums. The third position is occupied by LIC Freedom Finance Life increasing its share in the segment to 21.4% and collecting 1.6 billion tenge of premiums. The fourth significant position belongs to EIC, which has collected 1.3 billion tenge of premiums, occupying 17.1% of the segment.
The concentration of the AI sector among LICs is rapidly decreasing. At the end of seven months of 2020, the top three collected 72.8% of premiums against 93.7% of premiums collected by the two leading companies in the same period in 2019.
The health insurance (VHI) premiums among LICs for seven months of 2020 in annual terms have increased by 6163.8%, to 663.6 million tenge, largely due to the activity of LIC KM Life. The company's portfolio is 648.1 million tenge and forms 97.7% of premiums in this segment.
For the first seven months of 2020, the premiums in the sector “Insurance of an employee against accidents in the performance of his labor duties” (CAI) increased by 6.9%, to KZT 21.18 billion (year-on-year). LIC Nomad Life is the largest CAI portfolio of 5.3 billion tenge forming a share of 25.2% in the total CAI premiums. LIC Halyk life is in the second place collecting 3.9 billion tenge of premiums and occupying 18.8% of the CAI market. If the first two places in the top three of the segment leaders are stable, there is a keen fight for the third position.
Let us remind that following the results of six months of 2020, LIC Standard Life left the top three giving way to LIC KM Life. However, by the results of first seven months of 2020, the latter could not stay among the leaders giving place to LIC Eurasia, which collected 3.2 billion tenge of premiums and made 15.4% of the CAI segment. The portfolio of LIC KM Life amounted to 3 billion tenge (14.3% of the CAI segment), LIC Standard Life made 2.5 billion tenge (11.9% of the CAI segment).
As of January-July 2020, the total assets of LICs have increased by 53.1% (year-on-year) to KZT 580.9 billion. Insurance reserves amounted to 379.1 billion tenge increasing by 24.3%. The equity capital of LICs grew by 71.7% (year-on-year) to KZT 106.1 billion, exceeding KZT 100 billion.
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