...Growth Through Bancassurance Bancassurance has been the key driver of recent growth in the Kazakh insurance sector. The Kazakh bancassurance model generates strong profitability for insurers through the low loss ratio and for banks through high commission levels. However, Fitch Ratings' analysis indicates that bancassurance profits are repatriated and the capital outflow from the Kazakh insurance sector is increasing. Retained earnings accounted for 52% of Kazakh insurers' equity at end-2013, which suggests that shareholders are keen to retain flexibility to withdraw further capital from the sector. Regulation Key to Profit Fitch believes that prospects for sustained profitability of the bancassurance model will depend on the quality of regulation and further growth in consumer lending. Although nominally exclusive partnerships between banks and insurers are not allowed, in practice they appear to exist. The regulator may tighten the structure of tariffs set for policies sold as attachments...
