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Market cyclicality of premiums

LICs reduced the amount of premiums in certain sectors in March 2022.
Market cyclicality of premiums

The total gross premiums of LICs in March 2022 showed a negative trend of 12.7%. In monetary terms, LICs collected 82 billion tenge with the cumulative part of the insurance premium on the Unit-linked product.

LIC Nomad Life remains the only life insurance company offering a Unit-linked investment life insurance product. The cumulative part of the insurance premium on this product increased to 3.6 billion tenge in March.

According to the data of the National Bank of the Republic of Kazakhstan, as of end of March 2022, LIC Nomad Life is a leader among LICs in terms of collected premiums (29.3 billion tenge), including unit-linked sales. The market share of the company in the life insurance industry with unit-linked sales as of early April 2022 was 35.8%. March was marked by a decrease in the dynamics of premiums in the life insurance segment. In annual terms, the dynamics amounted to 29.6% against the February growth of 47.9%. LICs collected 42.3 billion tenge, the share of premiums in the life insurance segment formed 51.7% in the total portfolio of LICs.

LIC Nomad Life remains the leader of the life insurance segment. The 49.9% dynamics of the company's fees (year-on-year) was higher than the market growth rates, in absolute terms, the fees amounted to 16.3 billion tenge. A strong premium growth helped the company increase its market share in the life insurance segment to 38.5% from 34.8% in February.

LIC Halyk life is the second showing the dynamics of collections of 1% (year-on-year) against the annual growth of 29.8% in February. The insurance company collected 14.1 billion tenge reducing its share in the segment to 33.4%. LIC European Insurance Company (EIC) remains the third largest insurer in the life insurance segment. According to the results of March, the LIC’s premiums in annual terms increased by 13.6% to 5.7 billion tenge, however, the company's share in the segment decreased to 13.5%.

Annuity insurance slightly won back the depth of the fall in March 2022. If the annual drop in premiums amounted to 61% in February, in March it reduced to 52.8% (yoy). Almost all LICs collecting annuity premiums turned out to be in a negative growth zone. The total portfolio of LICs on annuity insurance amounted to 20.57 billion tenge forming 25% of the total premiums of LICs.

The collection of premiums on retirement annuities in annual terms fell by 51.7% against a fall of 65.3% in February (yoy). The fees amounted to 17.96 billion tenge in absolute terms. Based on the results of March 2022, LIC Nomad Life is leading in the annuity insurance sector and the segment of retirement annuities. The company's premium portfolio on annuity insurance amounted to 6.9 billion tenge, including 6.45 billion tenge in the retirement annuity segment. The market share of LIC Nomad Life in the segment of annuity insurance is 33.7%, including 35.9% in the retirement annuity segment. LIC Halyk life has the second largest portfolio in annuity insurance of 6 billion tenge, including retirement annuities of 5.2 billion tenge. It occupies 29.5% of the annuity insurance segment, including 29.2% in the retirement annuity segment. The third place is taken by LIC Freedom Finance Life; its premium portfolio amounted to 3.6 billion tenge in the annuity insurance segment, including 3 billion tenge on retirement annuities. The result allowed the company to increase its market share in the annuity segment to 17.6% from 15.9% in February 2022, and grow its share in retirement annuities to 17.1%.

The collection of premiums in the Employer's Liability Annuity (ELA) class at the end of March 2022 turned out to be in the positive zone and increased in comparison to February. If in February the annual dynamics was 5.3%, in March it accelerated to 29.5%. Three LICs showed increase above the market growth rates, two - below, two LICs turned out to be in the red zone of declining premiums. In monetary terms, the ELA segment premiums exceeded 1.4 billion tenge.

LIC Halyk life is still a leader of the ELA segment. As of early April, the company’s portfolio in the segment is 519.3 million tenge, having increased to 36.1%. LIC Nomad Life is in the second place. The company's premium portfolio grew to 398.9 mln tenge, and the market share in the segment's total premiums increased to 27.8%. LIC KM Life remains the third largest insurer in the ELA segment. The company's portfolio grew to 162.96 million tenge in March, but the market share in total segment premiums fell to 11.3% against 12.7% in February.

The segment “Other types of annuity insurance” showed the annual dynamics of 111.9% in March 2022, while the February annual dynamics was significantly higher - 173.4%. The total collection of LICs amounted to 1.17 billion tenge in monetary terms. According to the results of March, LIC Freedom Finance Life remains the segment leader. It collected 463.4 million tenge of premiums, but failed to maintain its market share in the segment, which reduced to 39.4% against 48% in February 2022.

Two other companies, the largest LICs in the “Other types of annuity insurance” segment, ​​faced changes in allocation of items. KM Life moved up from the third to second place collecting 335.6 million tenge, which allowed it to form a market share of 28.6% in the segment. LIC Halyk life moved down to the third position collecting 301.7 million tenge, which reduced its market share in the segment to 25.7%.

Accident insurance (AI) premiums collected among LICs reduced the dynamics of the fall in March 2022. The drop in premiums in annual terms amounted to 27.6% against the annual decline in fees by 63.9% in February. Four LICs showed a positive trend in premium collections, while four showed a negative trend. In total, LICs collected 3.57 billion tenge.

There were significant changes in the top three largest accident insurers among LICs in March. LIC Halyk life moved up from the third position to first collecting 975 million tenge of premiums and making a 27.3% share in the segment. The second position with a portfolio of 872.4 million tenge was taken by LIC Freedom Finance Life. The company's share in the segment decreased to 24.4% from 33.7% in February. LIC EIC fell from the first to third place collecting premiums in the amount of 769 million tenge and reducing its market share in the segment to 21.5% from 35.7% in February.

The premiums in the sector “Insurance of an employee against accidents in the performance of their labor duties” (CAI) accelerated to 31.2% in annual terms in March 2022 against annual dynamics of 18.8% in February. The total LIC portfolio on CAI exceeded 10.5 billion tenge.

At the end of March 2022, LIC Halyk life became the segment leader collecting 2.57 billion tenge of premiums and increasing its market share in the segment to 24.5% from 22.6% in February. LIC Nomad Life ranks second in the CAI segment with a portfolio of 2.4 billion tenge, having occupied 22.8% of the total CAI premiums.

LIC Eurasia remains the third major CAI insurer. The company's premium portfolio increased to 1.5 billion tenge in March, and the market share in the segment grew to 14.4%.

Health insurance premiums (VHI) among LICs demonstrated the highest growth dynamics among all segments of LIC premiums in March 2022. In annual terms, the premiums increased by 112.7% outperforming the February annual dynamics of 101.9%. Of the five LICs collecting premiums, four showed a positive trend, one negative.

LIC KM Life is still the segment leader. The company's portfolio grew by 91.4%, compared to February 2022 - by 2.8% in annual terms. A weak monthly growth left the portfolio of LIC KM Life on VHI in the amount of 1.2 billion tenge of premiums and reduced the market share in the segment to 85.3% against a share of 91.8% in January. Its competitors had stronger growth dynamics. LIC EIC increased premiums by 610.8% in annual terms, by 103% - as of end of the month, collecting 201.8 million tenge and increasing the segment market share to 13.9% against 7.6% in February.

As of end of March 2022, the total assets of LICs increased by 21.4% (yoy) amounting to 775.6 billion tenge. The insurance reserves grew by 24.8% to 572 billion tenge in annual terms. The equity capital of LICs increased by 12.7% (yoy) amounting to 134.6 billion tenge.

Photos are from open sources.

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