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COVID-19 Changes Everything Except Interest in Insurance

Kursiv reviewed what types of voluntary insurance are most popular during the pandemic

Photo: Ophelia Zhakayeva

According to the National Bank, the Kazakhstani voluntary insurance market in terms of collected premiums grew by 26.5 billion tenge ($63,260,800) in the first half of 2020. 

The main driver of voluntary insurance is property insurance that is very common for Kazakhstan. Thus, almost 125.9 billion tenge ($300,548,480) of premiums were collected in the first six months of the year, according to the National Bank. The property and vehicle insurance amounted to 72% of this money. As the survey of the market participants by Kursiv shows, customers are most interested in fully comprehensive car insurance as well as voluntary medical insurance.

HOW TO PROTECT YOUR CAR

According to Dauren Imanzhanov, chairman of the board of Nomad Insurance, the pandemic didn’t really hurt the voluntary insurance market. The only segment that was affected is the voluntary medical insurance for tourists because all international travel was banned. As statistics of the National Bank show, the total collection of premiums for those who traveled abroad in the first half of 2019 amounted to 1.5 billion tenge (about $3,5 million), compared to just 677 million tenge ($161,613) in the same period of time in 2020. 

“The reasons for the decrease in voluntary medical insurance for tourists are obvious. However, our company has increased sales of comprehensive insurance policies for car owners by 31%, policies of professional liability by 73%, property insurance by 101% and cargo insurance by 35%,” Imanzhanov said. 

Since the beginning of the quarantine, Freedom Finance Insurance has focused on new technologies and services, noticing that due to the pandemic, the people’s paying capacity in the country has dropped sharply. 

“Our most popular voluntary insurance product is CASCO Express,” says Daulet Akizhanov, chairman of the board of Freedom Finance Insurance. “This product was successfully launched in February and by the beginning of summer, when quarantine measures were softened and the movement of vehicles was allowed, the demand for this product has re-emerged."

The strong demand for voluntary car insurance has a close connection to the car loans market, according to experts. (For some car dealers, the amount of new cars sold in credit is about 80% of all sales). When such loans are issued, the car becomes a subject of the pledge that must be insured. Another factor that influenced the demand for comprehensive car insurance is the quarantine. Many companies were forced to suspend work, corporate cars were stuck in garages, and many market players began to offer car insurance against theft. The volume of fully comprehensive car insurance in Kommesk-Omir increased by 80% in the first half of the year compared to the same period in 2019 and amounted to 1.1 billion tenge (about $2.6 million).

MEDICAL AIRBAG

When the coronavirus pandemic hit the country, customers became more interested in medical products. The Kazakhstani market for voluntary health insurance grew by 4% from 20.7 billion tenge ($49.4 million) as of July 1, 2019, to 21.5 billion as of July 1, 2020 ($51.3 million).

“During the first half of the year, we saw very positive dynamics in the voluntary insurance for illness with an increase of premiums volume by 3.8% to 488.9 million tenge ($1.1 million), Oleg Khanin, head of Kommesk-Omir said.

As Bagdan Yernazarov, head of the strategic analysis department of Centras Insurance noted, the company also records an increase in demand for medical policies and voluntary car insurance.

“Our sales growth for voluntary medical insurance and comprehensive car insurance products amounted to 4% and 1%, respectively, compared to the first half of 2019. Voluntary insurance against financial losses and insurance of air transport showed good growth in sales too,” he stated. 

Among best sellers of another insurance company, Amanat, are comprehensive car insurance (797.8 million tenge of collected premiums or $1.9 million), property insurance (344.4 million tenge or about $822,000) and cargo insurance (132.6 million tenge or $316.542). Amanat was the only company that told Kursiv about the drop in sales.

“If compared to the same period last year, Amanat receives fewer insurance premiums. For example, in 2020 the volume of premiums in the comprehensive car insurance segment slid by 14.7%, in property insurance by 41%, and in cargo insurance by 8.8%. During this period, Amanat collected premiums for voluntary property insurance by 26.7% less than in six months of 2019,” says Raushan Sharipova, head of the underwriting department at Amanat Insurance.

When talking in private, many insurers say that the damage from the extension of quarantine measures, the closure of enterprises, and a decrease in the people’s purchasing power will begin to affect the market at the end of this year or early on next year.
 

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