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Kazakhstan Insurance Report 2011
Business Monitor International, Nov 2010, Pages: 42
The Kazakhstan Insurance Report provides industry professionals and strategists, corporate analysts, insurance associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kazakhstan's insurance industry.
In past years, we have described the insurance sector of Kazakhstan as being idiosyncratic. This remains the case. As is the case in a number of former member states of the Soviet Union, the life segment is miniscule by any standards. Those people who can afford to do so typically provide for the future without using life insurance. Voluntary car insurance (CASCO) is miniscule. According to the AFN, the country’s financial regulator, CASCO premiums accounted for just 2.4% of non-life premiums in H110. (The four largest non-life lines were: ‘insurance against other financial losses’ – 29.2%; ‘other insurance classes’ – 29.0%; ‘insurance of civil responsibility’ – 16.7%; and compulsory motorists’ third party liability (CMTPL) – 15.7%.
The impact of the global financial crisis and the local banking crisis was severe – but arguably no more so than in many Central and Eastern European countries. In local currency terms, non-life premiums (which, in Kazakhstan, are more or less the same as total premiums) slipped by 10% in 2008 and by 19% in 2009. In terms of euro or US dollar, the market contracted by around a third.
Although the political risks in Kazakhstan are significant, and the economy appears to be slowing again, we are reasonably confident that the insurance sector can return to a trend of strong growth. The surge in premiums over the years prior to the end of 2007 was greater in Kazakhstan than in other (very broadly) comparable countries such as Ukraine or Algeria. At this stage, we are confident that the non-life segment will begin to expand again at a rapid rate from 2011.
However, we do not as yet see a catalyst that will enable the life segment to move beyond its embryonic state.
Concretely, we note that total premiums amounted to KZT113,289mn in 2009. This includes non-life premiums of KZT103,958mn and life premiums of KZT9,331mn. In 2015, the corresponding figures should be KZT349,995mn, KZT324,702mn and KZT25,293mn. In terms of the key drivers that underpin our forecasts, we forecast non-life penetration to rise from 0.63% of GDP in 2009 to a still low 0.88% in 2015, while we expect life density to rise from US$4 per capita to US$13 over the same period.
Key Features Of This Report
The structure of this report is substantially similar to that of its predecessors. We have updated comments and data using information made available by regulators, trade associations and insurance companies over the course of 2010.
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