The main innovations in the general insurance sector for 2025 are, as before, related to mandatory auto insurance. In April of this year, moped drivers will be required to register their two-wheeled vehicles – they will need to obtain mandatory auto insurance. Additionally, conceptual discussions regarding mandatory insurance for residential properties will continue: the earthquakes in Almaty at the beginning of 2024 and large-scale flooding have highlighted the need for implementing mass property insurance for the population in case of natural disasters. Experts shared insights about these and other changes with a correspondent from the Kapital.kz business information center.
Azamat Kerimbaev, Chairman of the Board of Freedom Insurance, reports that starting January 1, 2025, an insurance agent (except for agents who are financial organizations ) will not be allowed to engage in intermediary activities for insurance contracts without having a valid insurance contract for their civil liability (GPO) towards third parties. The object of this contract includes risks associated with the professional responsibility of the insurance agent.
“The insurance contract for the GPO of the insurance agent towards third parties must be concluded with an insurance organization that does not have a valid agency agreement with this insurance agent for intermediary activities in the insurance market,” – explains the speaker.
Azamat Kerimbaev believes that this innovation will reduce the burden of liability placed on insurance organizations for compensating damages caused by insurance agents.
Ramazan Asilov, First Deputy Chairman of the Board of Jusan Garant, also mentions this innovation. “This insurance will protect clients of insurance companies from potential losses caused by mistakes or dishonest actions of insurance agents,” – he says. This increases trust in agents and the insurance system as a whole, adds Ramazan Asilov. “Moreover, the introduction of such a product will help stabilize the market by reducing the number of conflicts between clients and agents, as well as lowering reputational risks for insurance companies,” – summarizes the speaker.
The Mandatory Auto Insurance Market
Ramazan Asilov, First Deputy Chairman of the Board of Jusan Garant, points out that new corrective coefficients for calculating the cost of mandatory auto insurance will come into effect in 2025.
“This year, the ‘auto liability’ will become more expensive in Almaty, Turkestan, Zhambyl, West Kazakhstan, and Kyzylorda regions, as well as in Shymkent and Astana. In the other regions, which comprise the majority, it will become even cheaper,” – shares the speaker. “I mention this because in most of these regions, the cost of auto insurance was already reduced at the beginning of 2024 after the corrective coefficients were adopted.”
It is difficult to predict how this will affect the market, notes Ramazan Asilov. “I can only assume that in such conditions, the trend towards increasing payouts with the same premium collections and, consequently, losses in this sector of insurance will continue,” – he concludes.
In April (2025 – Ed.), moped drivers will be required to register their two-wheeled vehicles, emphasizes the speaker. “In addition to needing to obtain state registration numbers, driver’s licenses, and undergo annual technical inspections, they will also need to acquire mandatory auto insurance. As for the cost of the insurance, it will be approximately the same as for motorcyclists. According to various estimates, there are about 80,000 scooters in Kazakhstan – I believe this amount of vehicles will not significantly impact the insurance market,” – assumes Ramazan Asilov.
Nurtzhan Zhantureev, Deputy Chairman of the Board of Eurasia Insurance Company, is convinced that the situation in the mandatory auto insurance market requires the continuation of reforms initiated by the regulator (ARRFR – Ed.). This class of insurance plays an important social role in protecting the property interests of vehicle owners and other road users, notes the speaker.
“An effective measure, in addition to adjusting regional coefficients, could be to link the tariff to the driver’s adherence to traffic rules (PDD), as well as to the time the vehicle is on the road,” – explains Nurtzhan Zhantureev. “Drivers who violate traffic rules put themselves and others at greater risk, and this should affect the cost of insurance for them. For instance, taxi drivers travel ten times more distance per day than the average driver, also increasing the risk of accidents.”
According to the speaker, these measures are currently being discussed by market participants alongside the ARRFR and may take legislative shape as early as 2025. “It is important for the regulator to establish a fair balance between loss ratios and the cost of mandatory auto insurance,” – stated the Deputy Chairman of the Board of Eurasia Insurance.
Proposed Innovations in the Mandatory Auto Insurance Market
Azamat Kerimbaev, Chairman of the Board of Freedom Insurance, also spoke about the proposed innovations in this class of insurance for 2025. One of them is to amend the law on mandatory civil liability insurance for vehicle owners (OGPO VTS – Ed.) regarding the application of a bonus-malus system when concluding insurance contracts. Thus, it is planned to apply an increased coefficient when calculating the insurance premium in the following cases:
1. In the case of fines imposed on the insured for committing administrative offenses related to traffic rule violations.
2. If an accident occurs outside the registration region of the vehicle (TS) indicated in the policy, a class downgrade for the insured will be applied (corrective coefficient – Ed.), which will be significantly higher than in the case of an accident occurring in the vehicle's registration region.
3. The size of the insurance premium when concluding a mandatory civil liability insurance contract for vehicle owners will depend on the amount of insurance payouts made for claims that occurred due to the fault of the insured. In other words, the larger the insurance payout for previously concluded contracts, the greater the corrective coefficient will be applied.
“The application of increased coefficients when calculating the insurance premium and changing the class of the insured will raise awareness among the population and create an objective balance between the responsibilities of insurance companies and the rewards received for them,” – believes Azamat Kerimbaev.
He added that the introduction of new types of mandatory civil liability insurance contracts for vehicle owners is also being considered:
1. Standard extended coverage contract – concluded by the owner of the vehicle (TS) for each vehicle and applies to any person operating the vehicle on any legal grounds.
“Such a contract will resolve the issue of concluding contracts for rental cars, as well as vehicles used for other commercial purposes where there is a constant change of drivers. Given that in this situation the insurer does not have information about the individuals operating the vehicle and does not calculate the tariff for them, we consider it reasonable to apply the maximum tariff,” – explains the speaker.
For reference: an insurer is a legal entity that has obtained a license to carry out insurance activities in the Republic of Kazakhstan, obligated to make an insurance payout to the policyholder or another person in favor of whom the contract is concluded (beneficiary) within the limits of the amount specified in the contract (insurance amount).
2. Comprehensive extended coverage contract – concluded for all categories of vehicles or by categories at the choice of the policyholder.
“This contract, which will be concluded with the vehicle owner without reference to a specific vehicle but with reference to categories of vehicles, will be in demand among policyholders who provide sober driving services or frequently operate different vehicles,” – states the Chairman of the Board of Freedom Insurance.
For reference: the policyholder is the person who concludes an insurance contract with the insurer (