Last year, there were mergers and acquisitions in the domestic insurance market. Market participants attributed these trends to the regulator’s requirements to capitalization and reserves of insurers.
Kazakhstan’s general insurance market grew by more than 20% in 2011. The increase was registered in all classes of insurance. This was facilitated by several factors. Thus, a single insurance policy on compulsory insurance of car owners, which contains a unique identification number assigned by the Common insurance database, was introduce at the beginning of last year.

Zharkyn Alzhanov, Chairman of Board, Oil Insurance Company JSC
«A statement from a common database was introduced, which immediately affected the level of fraud and its presence on the market. It was somewhere around 60%, now it is about 80-90%. However, the certification of agents was introduced as well. Therefore, there have been some quality changes in the market.»

Certification of agents’ activities will be mandatory. Their list is available to consumers. According to market participants, these measures have improved the quality of services and increased the level of people’s confidence in insurance.

Zharkyn Alzhanov, Chairman of Board, Oil Insurance Company JSC
«The market is quite transparent today. Kazakhstan’s market has always been notable for this. Reforms are always carried out more quickly in Kazakhstan’s financial market. We are now in a period when we are quite transparent which was caused by the regulator through their actions.

A decline in the concentration of insurance premiums was a landmark phenomenon in the market. The share of five leading companies on collected premiums accounted for 41.7% of total insurance premiums or 72,835.4 million tenge. In 2010, those companies accounted for 45% of the market or 62,015.5 million tenge.

Zharkyn Alzhanov, Chairman of Board, Oil Insurance Company JSC
«There has been a 20% increase in almost all types of insurance, including both voluntary and compulsory insurance. There is also a very substantial trend in the growth of life insurance premiums.»

The main driver of growth in compulsory insurance lies in insurance of civil liability of vehicle owners. This type of insurance accounted for almost 58% or 23,358.9 million of insurance premiums. Voluntary personal insurance accounted for 21% or 9,967.3 million tenge of premiums.

Zharkyn Alzhanov, Chairman of Board, Oil Insurance Company JSC
«The regulator toughened the requirements for capitalization. Therefore, there were several mergers. I think that in the future the number of participants will decrease in the non-life insurance market. In general, there are currently only 7 life insurance companies and about 32 non-life insurance companies.»

The president highlighted the importance of strengthening the business and investment climate in the country in his recent address to the nation of Kazakhstan. In turn, this means that there should be an improved quality of Kazakhstani goods and services as well as increased competitiveness of economic entities. According to insurance market participants, the regulator sets particularly these goals by introducing new requirements for the companies’ activities.

Zharkyn Alzhanov, Chairman of Board, Oil Insurance Company JSC
«These are actually international requirements. I think it’s a common standard. It results in an increased competition among market participants which in turn leads to an increased quality of services. Therefore, we are making a big step toward what we were doing before, that is, transitioning from quantity to quality. The fewer participants we have on the market, the better the quality of services for our clients.»

According to the Financial Supervision Committee of the Kazakhstan National Bank, as of February 1, 2012 the country has 38 insurance companies. At the beginning of the year, assets of insurance companies exceeded 387 billion tenge.