Pursuant to the new report of AM Best, the Kazakhstan insurance market continues to move to active recovery.
In 2011 total premiums written were increased by 25.4% compared to the last year, and in 2012 total insurance premiums were increased by 12.5% compared to the 1H2011. In 1H2012, the life insurance segment was increased by 75% compared to the last year.
Carlos Wong-Fupuy, Senior Analytics Director said that insurers face a number of challenges. «…Insurers are the holders of debt securities of low investment class issued in the local Kazakhstan market, that makes them vulnerable in view of increased risk associated with political and financial systems of the country», — said the analyst.
Meanwhile, in recent years insurance companies have faced with significant losses from insurance of major risks. In particular, due to incurred property loss and stop of the enterprise as a result of huge fire on ArcelorMittal Temirtau plant in 2008, AIG Kazakhstan now renamed to ChartisKazakhstan paid USD 42 million. Also the lost Kazakh satellite KazSat-1 in the same year resulted in another huge insurance payment of circa USD 40 million under insurance claims.
Yvette Essen, the report's author and Industrial Research Director in Europe and emerging markets, added that the insurance penetration is low partly due to the fact than in conditions of socio-economic system of the former USSR the people as a rule trusted more to assistance from the State.
A.M. Best Company was founded in 1899 and is the oldest and most authoritative source of insurance rating and information.
