Kazakhstan opens its insurance market for foreign companies

Business Materials 2 February 2018 15:57 (UTC +04:00)
Insurance market is the first sphere where Kazakhstan will implement WTO requirements regarding the access for branches of foreign companies

Baku, Azerbaijan, Feb. 2

By Nigar Guliyeva – Trend:

Insurance market is the first sphere where Kazakhstan will implement WTO requirements regarding the access for branches of foreign companies in 2020, said Deputy Chairman of Kazakh National Bank Zhanat Kurmanov, addressing the lower house of the Parliament on Friday.

“In such circumstances the national insurance segment is low on time to work out a sustainable model of development allowing to stand to competition from foreign companies. Insufficient development of private insurance, low level of popular and business confidence, low accessibility to insurance services in all regions of Kazakhstan and lack of digital technologies in the market are the restraining reasons for the development of the insurance market,” Kurmanov said.

He also noted that an online insurance system will be implemented in Kazakhstan.

“Accessibility to insurance services throughout the territory of Kazakhstan can’t be assured in the lack of remote electronic digital services. A bill [On changes and amendments to the legislative acts of the Republic of Kazakhstan concerning the matters of insurance and insurance activities] provides for the implementation of online insurance, through which the people will be able to sign insurance contracts via internet resources of insurance companies not visiting their offices and insurance agents directly. Customers will be able to send online inquiries for requesting changes to their insurance contracts or getting insurance payments,” Kurmanov said.

The deputy chairman of the National Bank noted that the financial market of Kazakhstan is developing quite dynamically. He said that the market volume for the last 10 years has never exceeded 1 percent of GDP, and assets of all insurance companies are still under 2 percent level.

Share of assets of insurance companies for the last 11 months of 2017 amounted to 1.78 percent of GDP, share of insurance premiums was 0.60 percent of GDP, which is lower compared to previous years. In developed countries this figure is 6 percent or more.

The volume of insurance premiums has grown by a mere 2.63 percent in comparison with the previous year and totaled 311,902 million tenge. Obligatory insurance has grown by 7.1 percent, which is by over three times less compared to 2016 figures.

Premiums collected by insurance companies in voluntary property insurance are 7.11 percent lower than in the same period of the previous year. A substantial drop in growth of premiums could have been possible if not for a 19.38 percent increase in voluntary private insurance premiums that evened the loss in property insurance.

The total volume of insurance payments decreased by 12.8 percent in comparison with the same period of 2016 and amounted to 61,113 million tenge, while voluntary insurance payments fell by 52.2 percent. Obligatory and private insurance payments on the other hand increased moderately by 5.7 and 5.8 percent, respectively.