In August 2019 the total gross premiums of LICs have increased in comparison to the same period in 2018 by 57.7% (by 45.3 billion tenge) to 123.9 billion tenge.
Annuity insurance remains the driving force behind the life insurance sector development. Annuity insurance premiums increased in annual terms by 147.1% (by 26.9 billion tenge) amounting to 45.3 billion tenge by early September 2019.
Pension annuities contributed to the increase in premiums. The receipt of such premiums has increased by 194.5% (by 27.1 billion tenge) to 41.1 billion tenge over the calendar year (August 2018 - August 2019). It should be noted though that the dynamics of premiums in August for annuity insurance has slowed down somewhat compared to July.
But on the other hand, the life insurance segment in August gained a good premium collection rate. In comparison with the same period last year, the fees increased by 48.1% (by 15.1 billion tenge) to 46.5 billion tenge.
Out of six LICs operating in this segment, four showed premium growth dynamics above the market. LIC Standard Life performed the maximum growth of 2741.8% occupying 1.1% of the life insurance market with the portfolio of 526.3 million tenge. State Annuity Company (SAC) also continues to grow at a fast pace: the premiums have increased by 377.9% compared to last year, to 1.8 million tenge. The third LIC which showed a three-digit growth, LIC Nomad Life has increased the collection of premiums by 124.9%, collecting 8 billion tenge. According to the results of August, the share of LIC Nomad Life in the total life insurance premiums has decreased to 17.4%. However, the safety margin allows the company to remain the third largest player in the life insurance segment.
The only company with a negative index of premium collection (-2.9%) is LIC Freedom Finance Life occupying 2.3% of the life insurance market. Nevertheless, the company was able to reduce the rate of decline and bring the volume of premiums to 1 billion tenge.
The life insurance segment leader LIC Halyk life increased its market share to 49.3%, showing a dynamics of 26.8% and collecting 22.9 billion tenge premiums. Three largest LICs Halyk life, Nomad Life and the European Insurance Company (EIC) still occupy more than 96% of the life insurance market.
All companies working in annuity insurance showed a positive trend in premiums. LIC Standard Life showed the maximum growth above the market growth rate (207.6%). The company's fees on retirement annuities have increased by 253.7%, amounting to 4.1 billion tenge. LIC Standard Life retains the position of the third player in the annuity insurance class (9.7% of the market) and in the pension annuity class (10.2% of the market).
LIC Nomad Life is in the second place in the dynamics of premiums for annuity insurance and retirement annuities. On a year-on-year basis, the premiums increased by 173.7% and 239%, respectively. The LIC portfolio on annuity insurance is 22.3 billion tenge, on pension annuities - 20.5 billion tenge. A stable dynamics provides LIC Nomad Life with a leading position in the annuity and pension insurance segment. The share of the company in annuity insurance reaches 49.3%, and 50% in pension annuities of total volume of LIC premiums.
SAC remains the third in the dynamics of pension annuity collection. The premiums increased by 147.4% to 1.2 billion tenge in August (year-on-year), which allowed the LIC bring the market share to 3%. However, SAC has lost the dynamics in general for annuity insurance against a high growth of pension annuities. On a year-on-year basis, it fell to 89.4%, leaving the company 3.6% of the insurance annuity market.
According to the results of August 2019, the premiums on Employer Liability Annuity class increased by 4.3% to 3.3 billion tenge compared to last year. Of five LICs working in this insurance segment, two showed an increase in premiums, and three showed a drop. LIC Nomad Life remains the segment leader with premiums of 1.3 billion tenge accounting for 41.2% of total premiums for this insurance class. The second major insurer of AOR LIC Halyk life occupies 37.2% of the market with premiums of 1.2 billion tenge. According to the results of August, the leaders showed diverse dynamics: Halyk life premiums increased by 46.1%, and Nomad Life premiums decreased by 15.2%.
According to the results of August, the segment of other types of annuity insurance was not able to stop the decline in premiums. The negative dynamics of premiums amounted to 28.7% compared to the results of the same period of 2018. In monetary terms, the total portfolio of LICs for other annuities is 847 million tenge. In the overall portfolio of LIC the premiums for other annuities fell to 0.007%.
In August 2019, the accident insurance premiums (AI) collected by the LICs showed a dynamics of 5.5%, reaching 6.1 billion tenge. Four LICs increased their accident insurance premiums above the market growth rates, one LIC showed zero dynamics, and one demonstrated negative dynamics. LIC Standard Life increased premiums by 1143.4%, LIC Nomad Life - by 67.1%, EIC by 15.1%.
The segment leader LIC Halyk life increased the premiums by 9.6% year on year, collecting 3.6 billion tenge. The result allowed the company to strengthen its market position in the field of AI among LICs by increasing the market share to 59.1%. EIC remains the second largest LIC in this insurance segment (34.5% of the market) with the portfolio of 2.1 billion tenge. The two largest LICs form 93.5% of the market.
The VHI insurance portfolio of LICs continues to decline, it was reduced by 72.8% to 13.2 million tenge according to the results of August 2019 compared to the same period in 2018. VHI premiums are being collected by only a few LICs. LIC Standard Life remains a leader with the volume of premiums of 8.4 million tenge, the company increased the premium collection in August (year-on-year) by 84.1% occupying 63.5% of the VHI market by LICs. The second company, LIC Freedom Finance Life occupies 33.9% of the VHI market, having increased premiums in annual terms by 19.9% to 4.4 million tenge. The third market player, LIC Halyk life has practically stopped working in this market. Compared to the last year's results, the premiums fell by 99.1%; the company's portfolio is 346 thousand tenge. The company retains a market share of 2.61%.
The most interesting changes have occurred in the compulsory accident insurance class (CAI). According to the results of August 2019, CAI increased premiums by 12.9% compared to last year's period, collecting a portfolio of 26 billion tenge. Three LICs collecting premiums under CAI have increased their revenue, and two companies reduced it. The companies’ interest in the market resulting in a good dynamics of premiums, led to a revision of market positions in this insurance class. LIC Halyk life came out on top in terms of portfolio size. Despite the fact that the company reduced the collection of premiums by 23%, its portfolio under CAI reached 8.8 billion tenge, and the market share increased to 34%. Next is Nomad Life, the premium of which grew by 17.3%, and the portfolio amounted to 8.1 billion tenge. The company's market position fell to 31.1%.
LIC Eurasia, which share reached 11.6% and outrun the market share of LIC Standard Life (11.5%) is for the first time in the top three in terms of CAI. The portfolio of premiums of LIC Eurasia is 3 billion tenge, and Standard Life - 2.99 billion tenge, while its premiums in annual terms increased by 152.8%.
High dynamics of premiums gives LICs the opportunity to significantly increase assets; they grew by 24.1% to 386.1 billion tenge in August 2019 (year to year).
The insurance reserves increased by 29.4%, to 314.3 billion tenge. However, the month of August turned out to be difficult for some companies to make a profit. Three LICs failed to show a positive outcome. As a result, the total profit of all LICs did not exceed 11 billion tenge, 6.5% less than the results of 2018.
Nomad Life showed the maximum profit margin again.
The retained earnings of the company amounted to 4.4 billion tenge. The EIC moved to the second place, it earned 2.6 billion tenge of profit. LIC Halyk life fell to third place with a result of 2.1 billion tenge.