In the first quarter of 2024, the total assets of insurance companies of the Republic of Kazakhstan grew by 6.1% (to 2.65 trillion tenge), provided that both sector types (general insurance and life insurance) added at the same pace (the National Bank’s data, Kursiv’s calculations, see infographic). Securities formed the main share of asset profile (68.2% as of April 1), part of liquidity was directed to reverse repo transactions (9.5%) or placed on bank deposits (4.6%). According to the regulator, the increase in assets is “mainly due to boosting return from insurance activities” (investment activities are the second source of income of insurance companies).
In terms of players (there are in total 16 GICs and 9 LICs operating in the market), four companies have demonstrated the greatest growth in assets since the year beginning: IC Eurasia (+46 billion tenge in the quarter), LIC Halyk-Life (+38 billion), IC Halyk (+30 billion) and LIC Freedom Finance Life (+21 billion). In terms of expansion rate, they are all growing faster than the market, and the highest speed among them is so far shown by IC Halyk (+17%). Monetary growth in 12 companies ranges from 0.5 billion to 9.7 billion tenge. Nine organizations' assets decreased at the end of the quarter.
The total liabilities of companies for the period under review increased by 6.6% (up to 1.7 trillion tenge), including insurance reserves - by 9.0% (up to 1.5 trillion tenge). The equity capital of the insurance sector grew by 5.3% (to 952 billion tenge).
Core business
Based upon statistics, the demand for insurance products is increasing. According to ARDFM, almost 4.5 million insurance contracts were concluded in the first quarter of 2024, which was 36% more than in the same period in 2023. The main growth drivers are accident insurance services (700 thousand more contracts concluded, or by 112%) and life insurance services (an increase of 416 thousand contracts, or 81%).
The volume of premiums collected by companies since the year beginning equals to 367 billion tenge (the National Bank’s data), having increased by 27.6% in annual terms. ARDFM in its review indicates a higher growth of 34.6% (the regulator analyzes the figure excluding premiums on incoming reinsurance from residents and expenses for termination of contracts).
According to ARDFM, life insurance companies increased premiums by 115% year-on-year (from 63 billion to 135 billion tenge). An explosive 13-fold growth is demonstrated by annuity insurance, client premiums for which soared from 3 billion tenge in the first quarter of 2023 to 40 billion now, including contributions on retirement annuities, which increased by 77%, or 23 billion tenge. When three years ago Kazakhstanis were allowed to withdraw excess pension savings to buy housing and improve their health, the demand for this product fell sharply. However, as the main “surplus” from the UAPF was withdrawn, the annuity market, apparently, began to actively recover. A recent launch of a product such as a joint annuity that allowed pool the retirement savings of close relatives also played a certain role in this revival. The premiums on compulsory accident insurance of employees (+16 billion tenge, or +110%) and voluntary life insurance (+12 billion tenge, or +37%) have also noticeably increased in the LIC segment.
16 companies improved their last year's achievements in collecting premiums. The best dynamics in absolute terms was shown by Halyk-Life, which collected 23 billion tenge more than a year ago. Next come Freedom Life (+17 billion) and Nomad Life (+14 billion). LIC Eurasia is the closest to the top three (+5 billion). The highest growth rates (excluding the state-owned company KazakhExport, which has recently acquired the status of an export credit agency and surrendered its insurance license as unnecessary) are demonstrated by LIC Eurasia (+109%) and Freedom Life (+106%).
According to the National Bank, the total volume of insurance payouts in the first quarter grew by 31% year-on-year (from 51 billion to 67 billion tenge), including LICs – by 78% (up to 23 billion), GICs – by 15% (up to 44 billion). In the life insurance segment, the main increase in payments came from compulsory insurance policies for employees against accidents (+5.4 billion tenge, or +159%) and voluntary life insurance (+3.4 billion tenge, or +90%).
Source: https://kz.kursiv.media/2024-05-24/print1035-hrms-insurance/
Photos are from open sources.
