Kazakhstan’s state insurance sector is growing rapidly and presents many opportunities to ambitious companies that are not afraid to invest time and effort to bring the best deals to consumers. With the help of technology and through close government collaboration, BTA Insurance has achieved exactly that. The group has taken the helm at the forefront of the insurance industry’s developments within this growing country. In fact, recent figures showed that Kazakhstan’s economy is on a path of recovery with GDP growth exceeding 6.9 percent in the first quarter of the year with an average of around the same over the next five years from its current $9,000 to around $15,000 by 2016, the government of Kazakhstan reported. This presents an immense opportunity for a company which is striving to grow to its full potential.
BTA Insurance is a subsiduary company of BTA Bank, which in turn is a subsidiary of the Samruk Kazyna National Welfare Fund. The bank has shown involvement in various segments of the market and has emerged as a significant player in the Kazakhstani market.
According to the company, one of the most equitable divisions within insurance has proven to be international reinsurance. The group has recently stepped into this field and is hoping to expand further to be able to provide the best service to its clientele. It has long been known that BTA Insurance has an established proficiency within the insurance business. It is because of this knowledge and standing that it endeavours to discover new mechanisms of communication for its clients by providing novel, superior services that are also easily accessible to consumers.
In December 2010 BTA Insurance joined forces with two other industry players, Atlanta Polis and BTA Zabota. Progress since the merger and the company reorganisation has already revealed promising end results as the companies work together to bring into line their efforts to produce the best products and services for their clientele.
Sergey Lavrentiev, the Chairman of BTA Insurance’s board, said: “At the end of last year we assumed our assets in addition to all rights and obligations of the other two companies. This was quite a challenge yet taking into account the harmonious work of the three teams we were able to combine all assets and capture rights and obligations of the two new insurers within the space of only a month. Thanks to this we have successfully accomplished the reorganisation, and as of the start of 2011 were again in a position to continue separate insurance activity on behalf of BTA Insurance as well as for both legatees, BTA Zabota and Atlanta Polis.”
The unification was not easy however and the insurance company faced some obstacles on its way to integration. These were especially related to IT technologies as each of the three companies used different software systems. Luckily, this was swiftly resolved with an arrangement between the IT teams which were able to amalgamate the three insurance databases. On a smaller scale BTA Insurance had to deal with employment-related issues linked with the merger but was successful in meeting its social obligations and kept on most of the integrated companies’ staff.
It seems BTA Insurance’s timing slots perfectly into place with the recent diversification plan that has been announced by the nation’s government. The authorities have undertaken plans to expand the economy from its dependence on commodity prices. Kazakhstan’s government also hopes to achieve a balanced growth based on competitive and dynamic industries. In spite of all the progress however there are still elements that require advancement.
The company’s reorganisation took place within the Kazakhstan insurance market, which despite its signs of positive trends, is nonetheless poles apart from any other insurance market due to its more complex operating system. According to BTA Insurance’s chairman, the Kazakhstani Insurance market differs from other markets within CIS because of higher requirements from the National Bank of the Republic of Kazakhstan towards financial sustainability and reliability of insurance institutions.
“The country’s National Bank in its role as regulator of the financial market increases the solvency requirements of insurance companies with the aim to transfer to the implementing measures of a Solvency II level. As a result the Kazakhstani market is considered one of the most transparent markets within CIS for investors. We think that rising requirements of the National Bank of Kazakhstan will make other insurance companies follow the way of integration of the assets,” Lavrentiev says.
The company’s strategic goals had to adjust after its recent joint venture. Those new objectives come with responsibilities and higher risks but the company is aware of them and has prepared. Its assets have risen and surpassed KZT26bn, while equity rose to KZT22.5bn, now placing it third by size among its competitors. That fact gives additional potential for impetuous growth and development.
“Indeed, BTA Insurance has changed its strategic targets primarily as a result of the reorganisation. Since the fusion we have become one of the largest insurance companies in the country with representative offices in 22 regions. The asset and equity increase allows us to keep going with confidence while we compete with the other leading companies within the Kazakhstani insurance market. I believe it is fair to say that gives us additional potential for impetuous growth and development,” Lavrentiev notes.
Although perceived as a relatively tough challenge, the company strives to enter into competition with the top seven insurance companies of the Republic of Kazakhstan in terms of premiums collection. BTA Insurance is unwavering when it comes to its recognised service quality for insurers, however, and is adamant that quality will remain constant. It plans to create a simple, convenient environment with flawless techniques for insurance agreements. According to its chairman these will be go hand-in-hand with the development of new, watertight products for all insurance classes, among which medical insurance will present competitive advantages.
The market is constantly changing and the company is adapting to the needs of clients relentlessly. For instance Kazakhstan experienced a bout of heavy rains over the past months which caused house owners to at last consider insurance. According to reports it increased by as much as 10 percent over the summer. On average an insurance policy for a house of around 100sq. m could cost anything from $20 to $22 but momentarily, insurance of flats with a mortgage is obligatory while houses are not. The company knows that this is a small price to pay compared with the loss that could occur. BTA Insurance works with clients to ensure the best option is chosen depending on the individual needs, but it never loses sight of being open and honest with consumers.
The chairman states: “Our priority is to create a transparent universal insurance company which offers an elevated added value. In addition, we are ready to demonstrate our capability in the area of reinsurance, both in Kazakhstan and within the international insurance market. The plan is to achieve an international rating and to become an established insurance company with highly professional personnel.”
BTA Insurance prides itself in being able to consistently uphold the company’s key mission to protect the financial prosperity of people and companies it serves. The undertaking to keep its promise is largely achieved through accessible and satisfactory requirements to delivered services in the property and liability insurance field. This manifests itself particularly in the insurance premiums that have been paid out in the first half of 2011. The company ensured that payouts were accurate and timely, yet in strict compliance with the legislation of the Republic of Kazakhstan. So far the insurer has paid out $4.9m in total, including $1.09m for medical insurance, $1.7m in vehicle owner liability insurance, $1.6m in employee accident insurance, and $300,000 for motor transport insurance.
There is not much that can now stand in its path as progress continues, and the unification has run smoothly for BTA Insurance. The insurer has now reached a stage which requires it to look beyond its comfort zone. It is planning to obtain international ratings to confirm the financial sustainability and solvency of the company. “From our point of view such ratings, especially if received from an international rating agency and coupled with a high level of capitalisation will support our company in accessing the international reinsurance market. We realise that we take significant risks but we join the international insurance pool only to cover the risks that are taken abroad and handed over to us,” Lavrentiev says.
Social responsibility and community support play an important part within BTA Insurance and it tries hard to continually take an active part in the public and social life of Kazakhstan. The insurer gets involved in events within various communal organisations and unions. Most recently BTA Insurance worked alongside the Sport Climbing Association which unites children and adults by insuring them on all sports competitions. The company has also insured a range of other state organisation including the Library for Blind and Visually Impaired. Moreover, BTA Insurance integrates CSR into its relationship with the government and even competing insurance companies.
Lavrentiev notes: “We maintain close relationships with the authorities and other insurance companies. These particularly relate to the creation and development of mechanism on insured risks regarding consequences from natural and technologically caused catastrophes as they are socially significant to the entire population. It is important to us to offer a broad range of options to our clients.”
