Current State and Factors of Kazakhstan Compulsory Retail Insurance Potential Formation

The article focuses on the high priority of the insurance market development as an integral element of the market infrastructure of the Kazakhstan economy within the framework of determining the economic value of compulsory retail insurance. The economic content, tasks, and basic principles of the market of compulsory retail insurance in Kazakhstan were outlined. The position of compulsory retail insurance in the insurance market of the state was identified. The main type of compulsory retail insurance in the Republic of Kazakhstan, that is insurance of civil and legal liability of vehicle owners, was described and analysed. Basic tendencies of the market of compulsory retail insurance in Kazakhstan were identified. These include stable development with reduced economic efficiency due to the tendencies of companies to reduce insurance premiums when insuring civil and legal liability of vehicle owners. Specific features of the development of the compulsory retail insurance market of the Republic of Kazakhstan were determined. These are revealed in the regional and functional market concentration leading to its reduced competitive power and quality of insurance services. Using a principle component analysis (factor analysis), the level of impact of the social and economic state of the Republic of Kazakhstan and development trends of the world economy’s financial and economic sectors on the development of the Kazakhstan market of compulsory retail insurance was identified. A complex of measures was outlined to enhance the efficiency of the compulsory retail insurance market in Kazakhstan. In addition, it creates sources for building its financial potential in order to maintain the forecasted positive tendency of increasing the market efficiency for 2015 based on the major factor loadings of social and economic state of the Republic of Kazakhstan as well as development trends of the world economy’s financial and economic sectors.