"Almaty looks beyond the hand of the Almighty". The Times, London. 27.09.2006
David Watts meets an insurance chief who aims is to keep his country covered.
The people of Almaty are surprisingly phlegmatic for residents of a city that was flattened by an earthquake in 1911. Like other Kazahs, only a tiny fraction of them have insurance, writes David Watts.
One of the few to have protection in this oil-rush wealthy city is the headquarters of Eurasia Insurance.
The company chairman, Dr Boris Umanov, is determined to bring in foreign companies to educate Kazakhs in the benefits of insurance.
A physicist by training, “Dr Boris”, as he likes to be called, once used his skills to operate anti-missile systems for the Soviet army. Now he applies those laser-like predictive insights to the world insurance market.
He says there is plenty of business for all-comers: “If companies like Norwich Union will be here we will experience the best growth un the world because the market is underdeveloped.”
With insurance spending at $36 per capita per annum and insurance penetration at only one per cent, Umanov has some way to go before his fellow countrymen see the merits of his arguments.
“There is no insurance culture right now. The people have the ‘inshallah’ approach – they are a little bit relaxed about their fate. They think that if God decides I am to die there is nothing I can do about it. If we get lots of big insurance names together we can change the situation.”
And Umanov has some eye-catching ways to achieve his ends. From sponsoring a Sunday radio programme of Western pop music to handing out a CD of his favorite hits entitled Over the Rainbow and featuring the likes of Procol Harum and Jethro Tull.
The company itself is racing toward his goals almost as fast as the Kazakh economy, helped by new laws making such things as third-party motor insurance and employer’s liability insurance mandatory.
The company has its major fields of operation in the Kazakh domestic and reinsurance business and in international reinsurance. Here the firm can claim advantages, with the expertise of staff educated under the Soviet system and knowledge of, and access to, the whole of Russia and the former Soviet Union.
Its reinsurance interests are now truly global, with business in the US, Chile. Denmark, central Asia, the Middle East and Eastern Europe. The company’s annual report records accumulated profits of $63 million over the past two years.
Eurasia’s insurance policies are cautious and broadly based, as witnessed by its underwriting of the attempted launch of a Bellorussian satellite this July. The Dnepr rocket crashed to earth just 86 seconds after launch but Eurasia had only undertaken coverage of the craft’s orbit. “We have no liability,” Umanov says.
With political stability, economic success, a rainbow of ethnic groups and the approbation of all contiguous countries, Umanov believes Kazakhstan is ideally plased as a business and insurance hub for the future.