Kazakhstan to Overhaul Mandatory Auto Insurance and Guarantee Fund
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Kazakhstan's financial regulator has drafted a program to reform mandatory auto insurance and the insurance guarantee system through 2030. The plan introduces risk-based pricing and a preventive guarantee model for insurers. It follows a 44% rise in auto insurance premiums and a 179% jump in payouts from 2021 to 2025.
Key Facts
- Mandatory auto insurance premiums rose 44% from 82 billion tenge in 2021 to 118 billion tenge in 2025.
- Insurance payouts surged 179% from 38 billion tenge in 2021 to 106 billion tenge in 2025.
- The loss ratio in mandatory auto insurance increased from 51% in 2021 to 106.8% in 2025.
- The Insurance Guarantee Fund's reserves reached 39.4 billion tenge.
- The number of road accidents rose 9.5% in 2021-2022 to 7,862 cases and 51% in 2024-2025 to 19,142 cases.
Risk-Based Pricing
The reform will allow insurers to calculate premiums using their own driver scoring systems based on the Unified Insurance Database and state databases. Factors considered will include loss history, driving style, traffic violations, driver experience and age, and vehicle mileage, operating mode, and region of use. Scoring models will undergo preliminary testing and regular audits, with methodology documented and based solely on insurance risk factors. Insurers must disclose to clients the main factors affecting the policy price and provide an opportunity to challenge and revise risk assessment results. Low-risk drivers will receive more favorable insurance terms, while high-accident drivers will pay higher premiums.
Guarantee System Modernization
The Insurance Guarantee Fund (IGF) will transition to an expanded payout model under the new program. The guarantee system currently covers all mandatory insurance classes and all accumulative life insurance products. IGF reserves reached 39.4 billion tenge. The new model is based on a preventive approach, allowing the IGF to intervene before a license is revoked if an insurer shows signs of financial instability. This will enable early risk assessment, preparation of portfolio transfer mechanisms, and minimization of consequences for policyholders.
Implementation and Transparency
The transition to the new system will be phased, with scoring influence initially limited to ±20% of the current tariff. After confirming objectivity, the regulator plans to move to a unified tariff corridor where insurers can independently set policy prices. Tariff corridors will be set by the regulator based on independent actuarial assessment and regularly revised according to market conditions. A unified industry reference book for spare parts, consumables, and repair labor costs will be created to improve transparency of insurance payouts.
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Kazakhstan to Overhaul Mandatory Auto Insurance and Guarantee Fund
