Annuity insurance provided a powerful dynamics of the total premiums. Such premiums increased by 149.6% (by 24 billion tenge) annually, amounting to 40.1 billion tenge by early July 2019. The retirement annuities contributed to the premium increase. Their fees increased by 196.6% to 36.5 billion tenge for the calendar year (July 2018 - July 2019).
The rapid growth of retirement annuities and annuity insurance in general has led to parity between life and annuity insurance. Each segment makes 38% of the total LIC portfolio with premiums of 40 billion tenge.
However, life insurance did not stand still. LIC fees in this segment increased by 46.9% (12.8 billion tenge) according to the results of the calendar year, to 40.2 billion tenge. Of the six LICs working in this segment, only LIC Freedom Finance Life (which occupies 2.3% of the life insurance market) turned out to have a negative (-15.8%) dynamics of premiums. The premiums of four LICs grew above market growth rates. The maximum premium dynamics of 2656.9% was shown by LIC Standard Life (occupying 1.1% of the life insurance market with a portfolio of 461.7 million tenge). State Annuity Company (SAC) became the second in terms of premiums at 448%, collecting 1.8 million tenge.
The top three fast-growing companies are closed by LIC Nomad Life. The Company has grown by 135.8% collecting 7.4 billion tenge and occupying 18.5% of the life insurance market. The life insurance segment leader LIC Halyk Life retains 48.5% of the market. The company has increased premiums by 26% to 19.5 billion tenge. More than 96% of the life insurance market is still occupied by the three largest LICs: Halyk Life, Nomad Life and European Insurance Company (EIC).
All companies working in annuity insurance showed a positive trend in premiums. The fees of two LICs have been growing above the market growth rate, and three - lower. The largest increase in annuity insurance premiums (247.4%) and retirement annuities (291.1%) was demonstrated by LIC Standard Life. The company collected 4 billion tenge of premiums, of which 3.9 billion tenge falls on pension annuities. The result allowed it to keep the third position in annuity insurance, occupying 10% of the total market premiums.
LIC Nomad Life is in the second place in the dynamics of premiums. Its fees have grown by 174.6%, to 19.8 billion tenge. The high dynamics allowed LIC Nomad Life to strengthen its position as a leader in the annuity and pension insurance segment. The amount of insurance premiums in annuity insurance was 19.8 billion tenge occupying 49.3% of the total annuity insurance premiums among LICs. It should be noted, that the Nomad Life premiums on retirement annuities have been growing much faster, the dynamics has amounted to 238.7%, and fees have reached 18.3 billion tenge. The LIC Nomad Life share in the retirement annuity class reaches 50% of the total LIC premiums.
SAC has significantly pulled itself in annuity insurance by the end of July. The premiums have increased by 130.4% to 1.5 billion tenge; the company occupies 3.7% of the market. The retirement annuity premiums grew by 270.9% to 1 billion tenge, in this segment the State Annuity Company occupies 2.9% of the market.
According to the results of July 2019, the premiums in the employer liability annuity (ELA) class have increased by 5.4% compared to last year, amounting to 2.8 billion tenge. Nomad Life is the segment leader with premiums of 1.2 billion tenge accounting for 41% of the total premiums for this class of insurance among LICs. The second major ELA insurer is LIC Halyk Life occupies 37.6% of the market with premiums of 1 billion tenge. At the end of July, the companies showed diverse dynamics: Halyk Life premiums increased by 42.2%, and Nomad Life premiums decreased by 14.6%.
By results of July the class of other annuity insurance types following enhanced the fall in relation to July last year. The premiums fell by 30.4% dropping from 1 billion to 238.9 million tenge. In the total LIC portfolio the segment of other annuities occupies 1.6%.
The accident insurance premiums showed positive dynamics at 21.2% (year-on-year), reaching 5 billion tenge according to the results of July 2019. Three LICs increased premiums on accident insurance above market growth rates. Standard Life LIC increased premiums by 1143.4%, EIC – by 102.3%, Nomad Life LIC - by 93.5%. The segment leader’s (Halyk Life LIC) premiums grew by 3.9%. A large portfolio of 2.9 billion tenge allowed the company to increase its market share in accident insurance to 58.4% in July. The share of the two largest LICs for accident insurance (Halyk Life and EIC) is 93.7%, but it tends to decrease.
Health insurance (VMI) continues to lose ground in the total LIC portfolio. At the end of July 2019 premiums have decreased by 10.6 million tenge (year to year).
The segment leader LIC Standard Life with premiums of 7.3 million tenge, has increased premiums by 108% and occupies 69.5% of the VHI market in terms of LICs. The following LIC Freedom Finance Life that occupies 28.4% of the market has received 6% premiums less; its VHI portfolio is 3 million tenge. LIC Halyk Life being the third has dropped its VHI premiums by 99.4% in July. The LIC has collected 227 thousand tenge and its market share is 2.14%.
Compulsory accident insurance of employees in the performance of their labor duties (CAI) has built up 12% of premiums or 2.4 billion tenge to the last year results in July. The LICs collected 19.8 billion tenge in July 2019. Three LICs collecting premiums on CAI have increased their revenue, and two LICs have reduced it.
Nomad Life LIC is a leader in premiums raising 6.7 billion tenge. The life insurance company increased its market share in this segment to 34%. Halyk Life follows the leader collecting 5.6 billion tenge of premiums but losing 30.8% in premium dynamics. The LIC reduced its market share in CAI to 28.3%.
LIC Standard Life is in third place as in previous month. The Company has increased premiums by 220.4%, collecting 2.4 billion tenge, nevertheless, its market share in CAI has decreased to 12.5%.
A sustainable and high collection of premiums allows LICs to build up assets and insurance reserves. The LIC assets have increased by 25% to 379.3 billion tenge in July 2019 (year to year). The insurance reserves have increased by 29%, to 305 billion tenge. As a result, the total retained earnings of LICs grew by 21.9%, to 11.8 billion tenge. Nomad Life again showed the maximum profit margin. Retained earnings of the company amounted to 4.2 billion tenge. Halyk Life LIC is the second with 3.7 billion tenge, EIC is the third with 2.2 billion tenge. By the end of July, all LICs showed a positive insurance activity result.