BAKU, Azerbaijan, Nov.6
By Nargiz Sadikhova - Trend:
The core of Kazakhstan’s insurance market is the non-life insurance sector which accounted for almost 77 percent of gross written premiums (GWPs) in 2018, Trend reports with reference to the report of the RAEX-Europe rating agency.
However, according to the report, 2018 was the worst year in terms of GWPs, as after an upsurge in 2016, the sector entered a stagnation phase with negative growth in 2018, while gross claims, in contrast, went up by 12.8 percent.
“According to data for nine months of 2019, the non-life market revives, demonstrating 20 percent rise year to year. We expect the upward trend will persist fostered by launching of the electronic policies, which clients can buy directly online. In terms of segment distribution, the largest share in GWPs poses property insurance accounting for 26 percent followed by compulsory insurances, which together represented 33 percent of total GWPs by the end of 2018,” the report said.
The most dynamic insurance products in 2018 were insurance against accident and compulsory MTPL, with growth rates of 65 percent and 23 percent respectively, the agency said. The ratio of gross claims to GWPs stood at 28.2 percent in 2018, however for the nine months of 2019 gross claims increased significantly due to the large share of insurance against financial losses which amounted to 34.4 billion tenge ($88.4 million). The main portion of claims are related to MTPL (26 percent), property insurance (31 percent), and illness insurance (22 percent) in 2018.
“During 2019, four non-life insurance companies left the market, which was primarily influenced by the tightening of supervision over reinsurance operations and activities of insurance brokers. As a result, the share of premiums transferred to reinsurance in 2018 dropped to 16 percent in comparison to 35 percent in 2016. In 2019, the company Eurasia continues to maintain the leading position on the non-life insurance market.
In turn, the most dynamic life insurance sector has demonstrated accelerated growth; in 2018, GWPs were collected by 35 percent more than in 2017.
“Classical types of life insurance products accounted for 61 percent of total life sector GWPs in 2018; however, the annuity pension insurance is actively increasing its share, having collected 2,3 times more premiums from January through September 2019 year-on-year,” the report said.
On the other hand, the level of gross claims remains low with the ratio to GWP at 13 percent in 2018. The market comprises seven companies in 2019 with Halyk Life occupying the leading position, the report said.
“Taking into account the high demand for life insurance products, we expect this sector to continue to grow dynamically by broadening the product range and increasing the number of market participants. We expect the growth rate of premiums to reach in 2019 new record levels, moreover, as 82 percent more premiums have already been collected in the first nine months of 2019 than during the same period last year,” the report said.
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