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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 about 2.5 billion tenge was allocated from the republican budget in 2020, and about 1 billion tenge was allocated in 2021.

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.

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 will 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 platform. Automation of processes will minimize the human factor and ensure 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 gardens have been launched in Kazakhstan.

Today, the insurance market in the agro-industrial complex offers 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).

An addition has been made to the previously approved product for animal insurance (cattle), namely: the possibility of insuring cattle from 10 to 29 (inclusive) heads.

The insurance market has extended the terms for concluding insurance contracts for a 3-phase index product for winter crops until September 14 (inclusive), 2022, in order to be able to insure their risks against drought in the soil.