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KASE senior executive: “Life insurance companies are underestimated”

After a long and complicated discussion at the Standard & Poor’s conference, the Deputy Chairman of Kazakhstan Stock Exchange Andrei Tsalyuk immediately agreed on the interview with Lifeinsurance.kz portal.
KASE senior executive: “Life insurance companies are underestimated”

“I have been working in the market for many years, but still I often see how even journalists confuse some fundamental concepts of the stock market, the classification of securities, therefore am always ready for communication,” said Andrei Tsalyuk.

We were sitting in the hall of one of the city hotels.

- The insurance and stock markets are two closely interconnected systems around the world. The cash flows of the average foreign insurer in the stock market are often comparable to the turnover of large banks in Kazakhstan, but the situation in our country is different, isn’t it?

- I agree, at first sight, life insurance and stock market are competitors, since they are fighting for people’s savings. However, one does not interfere with the development of the other, but, on the contrary, exercises a salutary influence over it.

Kazakhstani securities market is lacking that, it needs institutional investors. The idea of ​​transferring of UAPF assets to the management of PAMC in the best case scenario will be felt in the domestic stock market in two years. Therefore, life insurance companies are now the most interesting player out of all institutional investors. I believe they will grow faster than all other market participants, so we have high expectations for them. Another thing is that the volume of assets in this market is still relatively small, but they have long money, which can create a steady flow of investment. It is able to create good demand in the market.

- As a rule, life insurance companies do not manage clients' money.

-We have a small market, and investment officers are expensive. Asset management consulting is a common practice worldwide. In Kazakhstan, insurance assets are usually managed by investment companies, which are simply called brokers. Life insurance companies are a naturally undervalued business in the financial sector that can grow and encourage the market. They are primarily interested in debt capital market, the bond market.

- Are LICs regulated in the stock market?

- It is clear that the regulator sets high demands on the quality of investment objects. If we take requirements for the rating level, then there are very few companies that can buy LIC in Kazakhstan. Therefore, the work both by us and the regulator is in progress. We want, on the one hand, to slightly reduce the requirements (possibly allow some unrated securities but on certain conditions), on the other hand, amend prudential regulation so that it is interesting to give long securities of reliable quasi-state companies to repo, to make it look effective in terms of accounting for the LIC capital.

Of course, we need to work in this direction. The market cannot miss the chance to attract a new growing institutional investor.

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