Insurance premiums for 8 months of the current year amounted to 263.5 billion tenge | FinReview
16 November 2018

Insurance premiums for 8 months of the current year amounted to 263.5 billion tenge

Review of indicators of insurance companies of Kazakhstan and the potential of the Internet insurance market. January – August 2018

For 8 months, insurance companies collected premiums in the areas of voluntary and compulsory insurance in the amount of 263.5 billion tenge – almost as much as a year earlier, and 28.1% more than five years ago.

Insurance payments amounted to 62 billion tenge – by 5.7% more than a year ago, and immediately by 58% more than five years earlier.

Recall, 01/01/19, in the Republic of Kazakhstan introduced online insurance. The Association of Insurers of Kazakhstan (ASC) believes that sales of e-policies via the Internet have a great future.

The Association explained: legislative changes stipulate that all compulsory insurance contracts will be concluded in electronic form and exist in non-documentary form, that is, in the form of electronic records. To carry with them paper policies in this situation is completely unnecessary, which means there will be no risk of forgetting them at home or losing them.

In addition, when concluding a contract of compulsory insurance of civil liability of car owners on the insurer’s website, the latter has the right to provide a discount of up to 10%. Thus, Kazakhstanis will be able to insure online on more favorable terms starting next year.

Показатели страховых компаний РК. Январь–август (млрд тг)

Online insurance is designed to disperse a fairly conservative insurance market, expand opportunities and increase the availability of insurance services for the public and business.

For example, in neighboring Russia, by the end of 2015, insurance weight via online channels was only 0.3%, by the end of 2016 it approached 0.47%, by the end of 2017 it exceeded 2.5%, and by the end of the first half of the year 2018 was already 4.7%.

As explained in the Association of Insurers of the Republic of Kazakhstan, on the one hand, this growth can be attributed to, among other things, the high demand for CTP in the so-called toxic regions, from which the insurers of CTP insurance left, and car owners had problems concluding contracts of compulsory insurance. In such regions, the share of online sales of CTP for 3 years increased to 57%.

On the other hand, the situation in Kazakhstan is different: here insurers plan to ensure the widespread availability of online insurance for the convenience of citizens, regardless of the region, and to fully offer e-policies throughout the territory of Kazakhstan.

Страховой рынок РФ. Продажи через интернет, доля (%)

It should be noted that Kazakhstanis are quite ready to switch to the active and mass use of Internet services for the purchase of online services. ASC specialists report that, although according to various data insurance applications from insurance companies’ websites still make up no more than 0.5–1% of total sales, this is primarily due to some legal restrictions that oblige insurers to identify a client and collect customer documents and deliver him a paper insurance policy. With the full launch of online insurance, significant growth is projected in the sector.

Also indirectly, the potential of the Internet insurance market is also indicated by the fact that already more than 46.9% of the total non-cash turnover on bank cards in Kazakhstan is occupied by Internet payments, against 36.3% a year earlier and 11.4% in 2015.

The analysts of the Association say that the insurance market also shows an increase in non-cash payments under insurance contracts. Especially relevant in insurance payments, in which the insurance premium is paid by installments and can be debited from the card automatically.