Insurance in Kazakhstan - Insurance history

Kazakhstan the first insurance companies appeared at the beginning of 1990. Generally it were the state insurance companies. The main push in development received the insurance market of Kazakhstan with adoption of law about insurance. In the first years of independence of Kazakhstan there was a set of insurance companies. During competitive fight feeble insurance companies were absorbed by the stable. Today in Kazakhstan 37 insurance companies which differ stability and reliability function.
The modern times advance, as we know, new ideas, and quite often opposite the just dominating. If less than 10 years ago the failure from the state insurance was read inadmissible, now, opposite, need of saving for any form of the state impact on insurance development is quite often called into question.
The origin beginning in Kazakhstan of institute of insurance matches over time independence acquisitions by our state. Formation of the insurance market happens in the conditions of economically transient period. Such macroeconomic phenomena as decline in production, insolvency of the enterprises, inflation, unemployment, bankruptcy of the unprofitable enterprises, directly affected its status. In the early nineties being originated insurance companies had no experience, solid financial means that in principle justifies those actions (occasionally hasty) which led to natural crash of the majority of insurers, and at the same time leaving of these insurance companies generated a wave of mistrust, insurance rejection as that at the majority of the population of the Republic of Kazakhstan. Certainly, at that time failures of insurance companies were explained not so much by small experience, how many financial instability of the state (a ruble zone, own money, landslide falling of a rate of national currency).
State development, enhancement of a financial system, led to that at present at us in the republic the insurance market which continues to develop the accelerated rates was practically created. Within implementation of the State program of development of insurance to the Republic of Kazakhstan for 2000 - 2002, the President of the Republic of Kazakhstan approved by the Decree of November 27, 2000 No. 491, the considerable operation on creation of new legislative base and the modern infrastructure of the national insurance market is done.
The tendency to increase of level of financial stability of insurance companies which place the assets in the most liquid financial instruments remains.
Features of formation of the modern market sector, and in particular rates of privatization and privatization, were reflected in structure of demand for insurance services. Insurance companies offer customers full range of services. However thus the share of insurance of interests of the population in which the priority role was played always by long-term life insurance and pension steadily decreases. Perspectives of increase of demand for the specified types of insurance it is necessary to connect only to stabilizing of an economic situation in the republic, rise of production and growth of welfare of the population. New approach is necessary for revival of this segment of the insurance market to formation of mechanisms of life insurance taking into account inflationary processes and opportunities of investment of means. If to speak about the volume of insurance of natural persons, it is possible to mark that readiness of insurance among residents of Alma-Ata is low. Only 31% of the population of the city have now the insurance policy, thus 29% insured don't remember the name of the insurance company which services they used.
In 2002 the date of performance of a state program of development of insurance ended. Despite a steady tendency of growth of the main indexes of the insurance market, for the present it is impossible to speak about cardinal changes in this sector of financial services.
Despite high growth rates, part of the tasks provided by the program, remained outstanding. The insurance market in the country still doesn't play the significant role in economy and population life, the list of services at many insurance companies remains limited. Possibilities of insurance companies don't meet growing needs of economy and the market of financial services, in the reinsurance sphere the insurance industry still is oriented generally on the foreign markets.
According to the program it was supposed that by the end of 2002 in the sphere of life insurance 5-10 insurance companies, in the sphere on general views of insurance of 15-20 insurance companies and as 2-3 specialized reinsurance organizations will be created will work. Need of support of bigger stability and increase of requirements from the RK National bank to the size of own capital of insurance company led to the considerable abbreviation of their number at the expense of more small-sized and feeble firms. The number of firms was reduced, however to increase number of the organizations which are engaged in life insurance, and to create the reinsurance companies, it wasn't possible.
Life insurance, in recent years, is the indisputable leader in a pattern on volumes of a collected award and growth rates.
It was supposed that by the end of 2002 the general capitalization of the insurance and reinsurance companies can increase with 2,3 to 5-7 billion tenge; the volume of collected insurance premiums in a year, in relation to gross domestic product, approximately increased from 0,3% to 0,8-1,2%, including on life insurance with 0,002 to 0,5%. Apparently from given above data, own capital of insurance companies already exceeded expected parameters. The share of insurance premiums to gross domestic product following the results of 2001 made 0,4%, and following the results of 2002 increased almost to 0,6% and only came nearer to the lower interval of an expected index.
Thus, the 3х-year program of development of insurance was implemented not fully. The insurance system didn't become an additional basis for increase of social protection of the population. Possibilities of insurance companies though grew, but level of their capitalization remains insufficient, and opportunities limited. While large projects in insurance are unavailable to the domestic companies, we will tell deposits of banks or the pension assets directed on increase of level of their safety. There were no insurance companies and noticeable institutional investors.
Economy growth along with actions of authorized body promoted development of the insurance market in the country. In recent years the National bank did a certain operation according to the solution of the accumulated problems of the insurance market. In particular, in the field of enhancement and development of legislative and normative and legal base, the solution of problems of increase of stability of the market and protection of insurers. The number of small-sized firms allowed to reduce increases of the requirement to insurers, to increase capitalization of the operating companies, their stability. The increase in assets of insurance companies was accompanied by improving of their structure and quality. Nevertheless, in the domestic insurance market it is impossible to recognize a state of affairs satisfied. Such situation is connected to a variety of reasons of objective and subjective character.
The main of the reasons hindering accelerated development of the market, is insufficient development of mandatory types of insurance. In August, 2003 the Interdepartmental commission on questions of introduction of mandatory types of insurance who should solve the accumulated problems in this sphere is created.
To number of the reasons of an unsatisfied state of affairs in the market of insurance services refer also low solvency of managing subjects of the population. Possibly, this reason is one of principal. The problem of low activity of the population in insurance, is connected to the lowest level of the income of the most part of the population that forces them to spend money first of all for a supply, clothes and utilities. It is natural that services of insurers thus aren't priority.
Insufficient level of insurance culture and mistrust of the population to life insurance institute also is considered one of a market problem. Closeness of the market doesn't promote increase of trust and interest of the population in insurance.
The specified reasons along with limited opportunities of insurers and need of enhancement of legislative and regulatory base hinder with more dynamic development of the market.

Evaluating the current situation in the insurance market of Kazakhstan as a whole it is possible to tell about the positive results: showing growth of assets and own capital of insurance companies, it is enhanced normative – legal system of mandatory insurance, for the purpose of gain of the state monitoring procedures a stress – tests of early warning are entered.
Besides, insurance companies support today the high level of profitability at the expense of low indexes unprofitable on voluntary property insurance. High rates of unprofitability were marked only on such types of insurance as: insurance of owners of vehicles, insurance plant growing and insurance of the employer, and also on voluntary medical insurance. Today insurance branch bore external and internal shocks and shocks of an economic crisis.
On compilation for January 1, 2010 in the insurance market of the Republic of Kazakhstan 32 insurance companies, 6 insurance brokers, 28 actuaries and 34 audit organizations having the license for implementation of audit of insurance company realize the licensed activities.
For reporting date of 29 insurance companies are participants of fund of guaranteeing insurance payments.
The volume of the insurance premiums collected on branches of insurance, looks as follows:
During 2010 the volume of the insurance premiums collected on branches ''life insurance'', makes 430 million tenges that exceeds a similar index of 2009 twice. The share of the insurance premiums collected on branches ''life insurance'' for reporting date, makes 1,5% against 0,9% for January 1, 2010.
The volume of the insurance premiums collected during 2010 on branches ''the general insurance'', makes 28 billion tenge that is 26% more, than for the similar period of 2009.
From total amount of the insurance premiums transferred to reinsurance, the main share occupy awards on voluntary property insurance – 96,8%, on voluntary insurance – 2,9%, on mandatory insurance – 0,3%.
As of January 1, 2011 the size of own capital of insurance companies made 9 billion tenge that is 47,3% more, than for similar date of last year.
According to the entered normative calculations of sufficiency of own capital of insurance companies includes liquid financial assets.
The total volume of assets of insurance companies for January 1, 2011 made 20,7 billion tenge that is 64,4% more than a similar index for January 1, 2010.
As of January 1, 2011 the amount of obligations of insurance companies made 7 billion tenge, having increased in comparison with a similar index of last year by 57%.
Generally, the gain of insurance premiums on the market in 2009 made 39%, in 2010 – 68% and in 2011 – 79%. Such dynamic growth of the Kazakhstan insurance market was caused first of all by activation of banking activities in economy crediting, development of insurance of risks financially – industrial groups, and also increase in the real income per capita, and, certainly, introduction of mandatory classes of insurance.
During 2010 from the market 6 companies left, 7 companies showed minus dynamics in comparison with the similar period of last year. The general recession of the market of crediting significantly affected the volume of awards of insurance companies. In particular, recession happened regarding sale of voluntary types of car insurance. Thus, domestic insurance business still strongly we depend on banking and raw sectors of economy.
Nevertheless, the insurance market shows stable growth. Offset towards retail business that creates balance for insurance companies is thus watched to be steadier in the market. As the Kazakhstan market is characterized today by narrow-mindedness regarding an affiliirovannost and weakness of voluntary types of insurance, this offset will positively be reflected in the market as a whole having increased the competition among players.

	Saturday, 20.04.2024, 13:22
	Insurance history

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