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Kazakh drivers will soon see their mandatory auto insurance policy costs directly influenced by their on-road behavior. The Agency for Regulation and Development of the Financial Market (ARDFM) announced plans for a significant tariff reform in the compulsory motor third-party liability insurance (MTPLI) sector.

Addressing Rising Costs and Accidents

This reform is a direct response to an increasing number of accidents and the escalating costs associated with vehicle repairs. The ARDFM noted that the gap between collected insurance premiums and paid claims has widened considerably. In 2025, MTPLI premiums rose by 17.5% to 118.0 billion tenge, but insurance payouts surged by 32.3% to 105.9 billion tenge. Nationwide, insurance payments increased by 38.1% to nearly 461.4 billion tenge.

Financial Strain on Insurers

According to the regulator, the financial stability of insurance companies has reached a critical point. The average MTPLI premium stands at 22.1 thousand tenge, while the maximum compensation for property damage is 2.6 million tenge, and for life damage, it's 8.7 million tenge. The number of road traffic accidents has climbed in the last two years, coupled with higher repair expenses. This has led to a 73% increase in MTPLI payouts, while premiums have only grown by 22%, placing significant financial pressure on insurers. The average market loss ratio has reached 107%, with some insurers heavily reliant on retail clients experiencing loss ratios between 120-150%.

Behavior-Based Pricing and Scoring Models

To tackle these challenges, the ARDFM intends to introduce flexible approaches to tariff formation. The new system will consider not only the region and the driver's accident history but also their "digital profile." The agency plans to implement scoring models to more accurately assess each policyholder's risk, encourage responsible driving, and reduce cross-subsidization between high- and low-risk drivers.

Digital Solutions and Future Outlook

Alongside the tariff reform, a digital "single window" solution is being considered. This platform would allow citizens to contract with any licensed insurance company without geographical restrictions, preventing insurers from refusing certain categories of drivers. Additionally, the Mazhilis (lower house of Parliament) is discussing a phased increase in the maximum insurance payout amounts. Any changes will be supported by thorough actuarial calculations to maintain a balance between citizens' interests and the payment capacity of insurance organizations.

The primary goal for these reforms by 2026 is to move the MTPLI sector away from "zero profitability" and establish a stable system capable of ensuring long-term payments to those affected.