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Аgricultural insurance

General information

In 2020, a new insurance system in the agro-industrial complex came into effect. The insurance operator is the Agrarian Credit Corporation, a subsidiary of Baiterek Holding.

In contrast to the compulsory form of insurance in crop production that has been in force since 2004, the new one has several innovations.

First, insurance in the agricultural sector is voluntary.

Secondly, there are no restrictions on industries - you can insure any direction within the agricultural sector.

Thirdly, state support is provided in the form of subsidizing insurance premiums. It is aimed at stimulating agricultural producers and reducing the cost of insurance contracts, for which more than 3 billion tenge has been allocated from the republican budget.

Thus, as part of the amendments made to the order of the Minister of Agriculture of the Republic of Kazakhstan dated May 19, 2020 No. 172 “On approval of the Rules for subsidizing insurance premiums”, from September 5, 2022, subsidizing amounted to 80% of the amount of insurance premium under insurance contracts in the agro-industrial complex. 

When developing a new system, the problematic issues of compulsory insurance in crop production were taken into account. Thus, in order to ensure the protection of the interests of agricultural producers, only insurance companies that have a license from the Agency of the Republic of Kazakhstan for the regulation and development of financial markets operate in the system.

Three international reinsurance companies with an “A” rating in the global insurance market are involved in the system. They reinsure the risks that domestic companies take on. This allows you to ensure guaranteed payments in the event of insurance risks.

All procedures, from the conclusion of an agreement to payments, are made on the basis of an electronic digital signature on the Agroinsurance information service.

Since January 2023, this service has been hosted on the platform. To participate in online insurance, an agricultural producer needs to register annually at the end of the calendar year on the platform. and pay the subscription fee, which in 2023 amounted to 10 MCI.

Automation of processes allows minimizing the human factor and ensures the transparency of work.

Operator in the field of insurance in the agro-industrial complex

By order of the Minister of Agriculture of the Republic of Kazakhstan dated September 10, 2021 No. 271, the Agrarian Credit Corporation was determined as an operator in the field of insurance in the agro-industrial complex.

The functions of an operator in the field of insurance in the agro-industrial complex include:

1) procurement of services to provide access to the insurance information system and its maintenance;

2) administration of the process of distribution of budgetary funds in the form of subsidies for insurance premiums;

3) development, examination and approval of insurance products subject to subsidization. Insurance products are developed by an operator in the field of insurance in the agro-industrial complex or by insurers. Insurance products subject to subsidization are agreed with the authorized body for regulation, control and supervision of the financial market and financial organizations;

4) monitoring of the insurance industry in the agro-industrial complex;

5) making proposals to the authorized body in the field of development of the agro-industrial complex for the development of insurance in the agro-industrial complex;

6) organization of the activities of the expert council.

Insurance products

Since September 2022, new insurance programs for intensive and semi-intensive orchards have been launched in Kazakhstan.

To date, the insurance market in the agro-industrial complex has offered the following insurance products:

I. Crop insurance

  1. soil moisture deficit index insurance (2 phases) ( passport 1 );
  2. soil moisture deficit index insurance (3 phases) ( passport 2 );
  3. soil moisture excess index insurance ( passport 3 );
  4. soil moisture deficit index insurance for winter crops (3 phases) ( passport 4 );
  5. pasture biomass index insurance ( passport 5 );
  6. insurance of perennial plantings - apple trees ( passport 13 );
  7. apple harvest insurance ( passport 14 ).

II. Livestock insurance

  1. cattle insurance (regular coverage) ( passport 6 );
  2. cattle insurance (extended coverage) ( passport 7 );
  3. small cattle insurance (regular coverage) ( passport 8);
  4. small cattle insurance (extended coverage) ( passport 9 );
  5. horse insurance (regular coverage) ( passport 10 );
  6. horse insurance (extended coverage) ( passport 11 );
  7. bird insurance ( passport 12 ).

In January 2023, the following changes were made to the index insurance products for soil moisture deficiency (2 phases, 3 phases) and excess soil moisture (passports 1, 2, 3 ):

  1. re-approved triggers for the 2023 season;
  2. changes have been made to the list of agricultural crops subject to insurance;
  3. changes were made to increase insurance rates.