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Growth in LIC premiums

LIC insurance premiums in January-August 2023 exceeded 300 billion tenge
Growth in LIC premiums

Total gross LIC premiums, including unit-linked sales grew by 27.8% in August 2023 against an increase of 33% in July (all year-on-year). The total insurance portfolio grew to 306.8 billion tenge in monetary terms. LIC Nomad Life remains the only company offering a Unit-linked investment life insurance product. According to the National Bank of the Republic of Kazakhstan, as of September 1, 2023, the company’s market share in the life insurance industry was 23.8% or 72,918 million tenge, including Unit-linked. As of early July 2023, the assets of LIC Nomad Life amounted to 290.6 billion tenge, equity capital - 24.3 billion tenge, insurance reserves - 212.3 billion tenge. One of the world’s largest reinsurance companies “Hannover re” (Germany) provides reinsurance services to Nomad Life.

The premiums in the Life Insurance class grew by 14.5% in annual terms in August against an annual increase of 11.2% in July. LICs collected over 136.8 billion tenge in monetary terms. The rate of growth built up the share of life insurance premiums in the total LIC portfolio to 44.5% against 43.38% in July.

According to the results of August, LIC Halyk life remains the segment leader with a portfolio of 63.2 billion tenge, or 46.2% of the life insurance market (46.3% in July). The second place is taken by the LIC Nomad Life. The company collected 34.3 billion tenge of premiums and made 25.1% in the segment (25.6% as of July). Both LICs showed an annual increase in premiums above the market rate. European Insurance Company (EIC) is in the third place with a portfolio of 17.5 billion tenge. Negative annual dynamics of premiums (-35.7%) reduced the share of LIC EIC in the life insurance segment to 12.8% against 13% in July. All LICs showed positive dynamics in premiums in relation to the results of the previous month. The concentration of premiums from the three largest LICs in the segment remains high. At the end of August, it was 84.1% versus 84.88% in July. The share of the first two LICs in the top 3 was 84.7%. 6 LICs showed positive dynamics in premiums in annual terms.

The dynamics of SESS premiums formed 32.8% in August compared to July, while in July compared to June the premiums grew by 61.3%. LICs collected 78.7 million tenge in total. Four LICs continue to collect premiums. LIC Halyk life remains the segment leader with a 41.7 million tenge portfolio or a 53.2% market share (49.1% in late July). LIC Nomad Life with a 19.4 million tenge portfolio and a 24.7% market share in the segment (24.9% at the end of July) is in the second place. LIC Freedom Life is in the third place with a 15.9 million tenge portfolio and a 20.3% segment share (24.3% as of July). The segment concentration in the SESS remains high. The first 2 LICs occupy 77.9% of the segment portfolio, the top 3 LICs make 98.2%.

Annuity insurance excluding retirement annuities grew by 56.3% in annual terms in August 2023 against an annual increase of 54.9% in July. LICs collected 3.4 billion tenge in monetary terms. LIC KM Life is still the segment leader with a portfolio of 2.2 billion tenge. The annual increase in the company’s premiums remains at a high level. Its premiums built up by 118.7% in annual terms in August (127% in late July). However, the company’s segment share reduced to 66% in late August against 68.7% in late July. LIC Halyk life is the second with 778.2 million tenge of premiums, which corresponds to a 22.8% segment share (24.9% at the end of July). LIC Freedom Life is the third with a 187.7 million tenge portfolio, which is 5.5% of the segment (4.5% in July). The segment's concentration remains high although it is dropping. The share of the three largest insurers in the segment is 94.2% in August versus 98.1% in July.

The retirement annuity premium portfolio continued to decline in growth dynamics in August 2023. The premiums increased by 40.4% in annual terms against the dynamics of 44.1% in July. The volume of premiums amounted to 71.5 billion tenge in monetary terms. The share of retirement annuities in the total LIC portfolio is 23.3% having reduced from 23.7% in July. LIC Nomad Life remains the leader in the retirement annuity segment with a premium volume of

24 billion tenge and a 33.6% share in the segment (33.8% in July). LIC Halyk life is in the second place with a 20.5 billion tenge portfolio and a 28.6% segment share (28.7% in late July). The third place is held by LIC Freedom Life, the portfolio increased to 14.6 billion tenge making a 20.5% share in the segment (20.2% at the end of July). The concentration of premiums of the three largest LICs in the segment was 82.7% in August versus 82.66% in July.

Accident insurance (AI) premiums collected by LICs declined in August 2023 and showed an increase of 148.6% against the growth of 172.6% at the end of July (all year-on-year). LICs collected 32.3 billion tenge in monetary terms, which was 10.5% of total LIC fees (11% of total LIC premiums at the end of July). LIC Freedom Life remains the segment leader with a 13.6 billion tenge portfolio and 42.3% of the segment (a 40.5% segment share in July). LIC KM Life is in the second place with a portfolio of 9.2 billion tenge, which corresponds to a 28.6% segment share (31.4% at the end of July). LIC EIC is in the third place. The company’s portfolio exceeds 6 billion tenge and occupies 18.8% of the segment (17.9% as of July). All LICs showed positive premium dynamics in monthly terms. 6 LICs increased their premiums in annual terms. The concentration of premiums in the segment remains very high. The fees of the three largest accident insurers by LIC make 89.78%.

The premiums in the sector “Insurance of an employee against accidents during the performance of work duties” (CAI) at the end of August 2023 reduced the growth dynamics to 25% against an increase of 53.4% in July (all year-on-year). The cash fees of LICs exceeded 59 billion tenge. The CAI premium portfolio forms 19.2% of the total LIC portfolio (19.5% at the end of July). According to the results of August, LIC Halyk life remains the segment leader with a 15.5 billion tenge portfolio and 26.3% of the segment (26.6% of the segment in July). LIC Nomad Life takes the second place with a portfolio of 13.9 billion tenge, which is 23.6% of the segment (as of July - 23.9%). Based on the results of August 2023, LIC Eurasia occupies the third place with 8.9 billion tenge and 15.2% of the segment. LIC KM Life, which has previously been in the third place with a 7 billion tenge portfolio and a 11.9%market share, has left the top three largest LICs in CAI. In August, the segment concentration grew slightly due to a monthly increase in premiums of 47.7% at LIC Eurasia. The share of the three largest LICs in the segment was 64.9% at the end of August versus 63.2% in July.

The health insurance (VHI) segment by LIC grew by 21.5% in August 2023 against an increase of 35.4% in July (all year-on-year). Fees amounted to 3.4 billion tenge in absolute figures. The share of voluntary health insurance premiums by LIC in total premiums formed 1.1%. LIC EIC remains the leader of the segment with a 2.1 billion tenge portfolio and a 60.8% market share (late July - 61.1%). LIС Eurasia is in the second place. The company collected 1.1 billion tenge in premiums forming 32.4% in the segment (31% of the segment in late July). LIC Freedom Life is in the third position with a 120.8 million tenge portfolio. Its share in the segment is 3.5% versus 4% in July. The share of the three largest VHI insurers in the context of among LICs grew to 96.7% against 96.1% at the end of July.

As of July 1, 2023, the regulatory assets of LICs increased by 23.5% in annual terms exceeding 1 trillion tenge. The insurance reserves built up by 14.4%, exceeding 691.5 billion tenge (year-on-year). The equity capital of LICs grew by 47.1% compared to the same period in 2022 and amounted to 218.4 billion tenge.

Photos are from open sources.

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