In 2023, there was a significant increase in demand for pension annuities, life insurance, and accident insurance in Kazakhstan. According to the analytical center of the Association of Financiers of Kazakhstan (AFK), the rise in demand for life insurance products resulted in a 34% increase in insurance premiums, reaching 128.1 billion tenge. This growth was driven by a higher demand for pension annuity insurance, life insurance, and accident insurance, with the number of contracts increasing by 2.3 times, 53.9%, and 3 times, respectively.
Additionally, last year, life insurance companies actively operated in the tourism market, with 346.7 thousand contracts worth a total of 1.7 billion tenge being signed. This led to a decrease in the volume of premiums collected for tourist insurance by general insurance companies by 5.6%.
In terms of overall financial results, the assets of life insurance companies increased to 1,118.7 billion tenge, accounting for 44.8% of the total insurance market assets. The sector's net profit grew by 44.6% to 92.5 billion tenge due to increased income from investment activities and reduced expenses related to the termination of insurance contracts. However, the return on equity for the life insurance market decreased to 21% compared to 30% in 2022.
Looking ahead to 2024, AFK estimates that the implementation of the voluntary cumulative system "Keleshеk" could contribute to the growth of insurance premiums in the sector. This system includes educational capital from the state, annual government premiums, and investment income. Additionally, the country plans to introduce mandatory insurance for the professional liability of medical workers and further digitization in claims settlement and insurance payouts.
While legislative changes regarding mandatory accident insurance for workers could potentially limit the growth potential of life insurance companies, global consulting company Accenture forecasts a positive year for life insurance companies in developing markets. This optimism is fueled by an increased demand for savings and pension products, as well as cost minimization through the development of artificial intelligence technologies.
