Kazakhstan is in the centre of Eurasia and with a territory of 2,727,300 square kilometres, greater than that of Western Europe, is ranked as the world’s ninth-largest country and the largest landlocked state.

Crude oil is the driver of economic development, and high world crude oil prices have had a crucial impact on annual GDP growth figures, which tended to exceed 9% a year since 2000, although it fell to 3.2% in 2007. Other major exports include wheat, textiles and livestock and some forecasts suggest that this year Kazakhstan will become a leading exporter of uranium.

Kazakh market overview

Total insurance premiums underwritten during 2009 by insurance/ reinsurance organisations under direct insurance agreements totalled KZT113,289.71m (EUR622m), down 15.1% on the year.

At the beginning of this year, the total insurance premiums collected by the life and non-life sectors totalled KZT113,289.7m. The life sector was by far the smaller but showed a healthier growth. As of 1 January 2010 total premiums stood at KZT9,331.3m, which was up 61.5% on the previous year and accounted for 8.2% of total premium, although this was nearly double the previous year’s percentage of 4.3%. General insurance premiums totalled KZT103,958.4m, which was down 18.6% on the year.

Looking at the figures in more detail shows that total insurance premiums for mandatory insurance rose 1.7% on the year and those for voluntary personal insurance increased 16.1%. But the voluntary property insurance premium volume fell 28.1%.

Breaking down the 1 January 2010 premium mix by insurance classes one finds that:

1. Mandatory insurance:

• MTPL: KZT16,794.3m or 55.0%;
• Employers’ civil liability insurance against causing death or injury to employees at work: KZT9,958.2m or 32.6%;
• Civil liability insurance for owners of facilities whose operations run the risk of causing damage to third parties: KZT1,678.5m or 5.5%;
• Others: 6.9%.

2. Voluntary personal insurance:

• Casualty insurance: KZT4,491.0m or 20,5%;
• Health insurance: KZT8,099.9m or 36.9%;
• Life insurance: KZT1,334.2m or 6.1%;
• Annuity insurance: KZT7,999.1m or 36.5%.

3. Voluntary property insurance:

• Insurance on other financial losses: KZT4,228.8m or 6.9%;
• Property (except for automobile, air, railway, waterborne transport and Cargo insurance): KZT32,855.7m or 54.0%;
• Civil liability (GTPL): KZT11,330.7m or 18.6%;
• Others: 20.5%.

Reinsurance

Insurance premiums passed for reinsurance equalled KZT55,880.4m, accounting for 49.3% of total insurance premiums, the bulk of which, 43% of total insurance premiums, went to non-resident reinsurers.

Insurance premiums received by insurance/reinsurance organisations under reinsurance agreements totalled KZT19,186.8m, of which KZT11,101.9m was accepted from non-residents for reinsurance equals.

Insurance payments during 2009 totalled KZT27,756.02m, of which KZT10,456.6m, or 37.7%, was from reinsurance compensation from reinsurance organisations.

Breaking down 2009 insurance payments by insurance classes one can see that:

1. Mandatory insurance:

• MTPL cover accounted for KZT3,373.9m, or 43.3%;
• Employers’ civil liability cover against causing death or injury to employees at work: KZT3,594.7m, or 46.1%;
• Crop insurance: KZT767.1m, or 9.8%;
• Other classes: 0.8%.

2. Voluntary personal insurance:

• Health: KZT6,093.2m or 69,1%;
• Payments on casualty: KZT636.3m, or 7.2%;
• Annuity: KZT1,886.8m, or 21.5%;
• Life: KZT196.3m or 2.2%.

3. Voluntary property insurance:

• Insurance against other financial losses: KZT1,070.1m, or 9.6%;
• Motor: KZT1,493.1m, or 13.4%;
• Property (except for automobile, air, railway, waterborne transport and Cargo insurance): KZT7,602.1m, or 68.2%;
• Other classes: 8.8%. Property insurance (except for automobile, air, railway, waterborne transport and Cargo) accounted for the largest volume of payments in 2009, at 27.4% of the total.

The structure of the insurance market

At the beginning of the year there were 41 insurance organisations, of which seven life insurers, 13 insurance brokers and 63 actuaries engaged in licensed activity in Kazakhstan’s insurance market, and their total capital totalled KZT180,480m.

They had total assets of KZT297,252.1m, up 10,6% on the year, and total liabilities increased 13.5% to KZT116,772.2m.

As of reporting date their total insurance reserves, required to fulfil their obligations under current insurance and reinsurance agreements, totalled KZT101,011.5m, which marked a 17.1% increase on the previous year.

Their investment portfolio mix in 2009 was characterised by a more than doubling of the proportion allotted to Kazakh government securities, to 20.6% from 9.6%.

The year saw a decrease in market concentration in terms of premiums and payments. The top five insurers accounted for 43.5% of total premiums and 52.8% of payments. The top five accounted for 51.3% of the market players’ total assets.