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Shift to Free Float Tenge Could Bankrupts Small Insurers

Saturday 12 September 2015

ALMATY (Interfax-Kazakhstan) — The insurers surveyed by Interfax-Kazakhstan believe that the transition to a free floating tenge could lead to a series of bankruptcies of small and medium-sized insurance companies and increase losses from certain types of insurance.

Kommesk-Omir chair Oleg Khanin forecasts that the average cost of damage under insurance contracts of civil liability of car owners and motor hull will increase. He also expects an increase in losses in voluntary medical insurance due to rising prices for imported medicines, chemicals and medical equipment. Travel insurance cost may rise as well, he said, as they are pegged to the dollar and euro.

Eurasia insurance company predicts mass bankruptcy of small and medium-sized insurance companies and further consolidation of the insurance market. “At the end of the year the growth of insurance premiums should be slightly above the level of last year. Our forecast of the total insurance premiums stands at 205-210 bln tenge by yearend”, the company said.

Kazkommerts-Life said that the fluctuation of the national currency, high inflationary expectations, risings consumer prices and lower purchasing power would pressure voluntary types of insurance.

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