Insurance companies are likely to get consolidated

The possibility of mass merging of insurance companies is growing in Kazakhstan, Kazakhstan daily reports. Talgat Ussenov, Chairman of Almaty-based Centras Insurance says that merger probability is very high because the Financial Supervision Agency regulating the insurance market of Kazakhstan toughened its requirements to the companies’ capital. The insurance market has been developing in Kazakhstan since 1997. But at that time the capital requirements were much lower: roughly 25 million tenge. By the end of 2009 the requirements had gradually grown to 670 million tenge. But in April 2010 the Financial Supervision Agency started to further increasing the requirements aiming to reach 1.2 million by the end of 2011. While in 1997 virtually every financial group could afford to establish its own insurance company, now the remaining ones are struggling trying to cope with the escalating requirements. There are 38 insurance and reinsurance companies in Kazakhstan now, but it remains to be seen how many of them are going to be left by the end of the year.