Understanding Kazakhstan’s Insurance Trends: Growth vs. Loss

At first glance, Kazakhstan’s insurance market seems stable. Since the start of 2025 total assets of insurance companies rose by 3.5%, reaching 3.24 trillion tenge. Insurance premiums jumped nearly 24% to 281.7 billion tenge. Even the share of premiums in GDP increased — from 0.89% last year to 1.15% now.

But behind these numbers lies a troubling trend: in the first two months of 2025, the sector posted a net loss of 283 million tenge, compared to a profit of 33.5 billion tenge a year earlier. How can a system with rising premiums and assets slip into the red?

Investment Crash: Returns Turn Negative

A key reason is negative investment performance, particularly in general insurance. Overall investment income plummeted by 106.8% — from 32.9 billion to -2.2 billion tenge.

General insurance was hit hardest, recording a loss of -7.9 billion tenge from investments, down from a profit of 14.7 billion a year ago. Even the traditionally stable life insurance segment saw its investment income shrink by over 68% — from 18.2 billion to 5.7 billion tenge.

Expenses Outpace Revenue

While total sector revenue rose by 9.2%, expenses jumped 28.9%, hitting 230.2 billion tenge. The main cost drivers were:

•  Claims payouts: +42.7%

•  Change in net reserves: +32.2%

•  Commission fees: +37.7%

Notably, expenses related to policy cancellations surged by 28.1% to 31.1 billion tenge — a sign of contract instability or poor client selection.

Life Insurance Failed to Cushion the Blow

Even though life insurance showed growth in several areas — including a 39.8% rise in premiums — the segment still ended in the red with a net loss of -752 million tenge. The culprits:

•  Slumping investment returns

•  Rising commissions: +53.4%

•  Growing claims payouts: +39.3%

•  Soaring costs from policy cancellations: +63%

Despite its growth, this segment couldn’t offset the rising costs.

General Insurance: Flat Outcome

General insurance barely broke even, with profits of just 469 million tenge — a 97.4% drop from the previous year.

Key points:

•  Overall expenses stayed flat (+1.3%)

•  Investment returns were negative

•  Commissions grew only modestly — up 13%

In short, the growth in premiums (+13.2%) was wiped out by other costs.

Solvency and Stability Under Pressure

The actual solvency margin dropped from 637.5 to 623.9 billion tenge. The solvency ratio fell from 4.16 to 3.07, hinting at weakening financial stability.

Despite maintaining high liquidity (83.6% of total assets), the margin’s decline is worrying — the sector’s safety cushion is shrinking.

Macro Snapshot: Strong Figures, Weak Results

•  Sector assets as % of GDP: 2.39%

•  Premiums per capita: 76,831 tenge

•  ROA (Return on Assets): 6.2%

•  ROE (Return on Equity): 19.3%

Considering the loss in Q1, these figures reflect last year’s profitability — not this year’s reality. Immediate re-evaluation is needed.

On paper, the sector is expanding. In reality, it’s facing losses and systemic issues. The insurance market is caught in a trap: rising premiums are being overwhelmed by escalating costs and losses.