Insurance (Russian market)

Types of insurance

• Title Property Insurance
• Cyberinsurance
• OSAGO (Compulsory Civil Liability Insurance)
• COMPREHENSIVE INSURANCE

AIS "Insurance"

Main article: Insurance (automated information system)

Recourse and Subregulation Indebtedness

Main item: Recourse and Subregulation Debt in Russia

A subrogation claim is a transition to an insurance company that has paid insurance compensation, the right to claim compensation from the person responsible for the damage. This requirement applies to a situation where the insurance of the OSAGO guilty of causing damage did not cover the amount of damage in an accident and the insurer CASCO who paid for it collects the difference from the person or organization that caused the damage.

The recourse claim is the right of the insurance company to demand from the perpetrator of the accident to compensate her for what she spent on compensation for losses under OSAGO to the victim.

2024

The Central Bank of the Russian Federation named 8 main directions for the development of the insurance market for the coming years

The Bank of Russia has identified eight key areas for the development of the insurance market for the period from 2025 to 2027. This is stated in the draft "Main directions for the development of the financial market for 2025 and the period 2026 and 2027," published on September 16, 2024. In the document, the regulator emphasizes the need to adapt the insurance sector to current changes in the economy and strengthen its role in protecting the interests of business and the well-being of citizens.

One of the main priorities will be the development of life insurance. The Central Bank of the Russian Federation intends to introduce a guarantee system under life insurance contracts, which will function by analogy with insurance of deposits in banks and guarantee of pension funds in NPFs.

The Bank of Russia outlined several directions for the development of the insurance market

From January 1, 2025, the Bank of Russia plans to launch a new product for the insurance market - shared life insurance. This tool combines life insurance with the ability to invest a portion of the premium paid into mutual funds. To improve the voluntary insurance system, the Central Bank of the Russian Federation will continue to regulate insurance conditions by types of low customer value, and will introduce requirements for disclosing information about insurance products.

The regulator also intends to improve the compulsory insurance system by eliminating existing problems with the availability of insurance services. The purpose of this work will be to increase confidence in the compulsory insurance system and ensure the ability of insurers to use insurance products in various areas.

The next important area is to increase information transparency in the insurance market. Since 2024, the transfer of data on car insurance and housing insurance to the centralized AIS insurance system has already begun.

The Bank of Russia is also introducing a risk-oriented approach to the regulation of the insurance sector. The development of a new model for assessing insurance risks will make it possible to more accurately determine the capital necessary for insurance companies and ensure their financial stability.

Other measures include expanding and refining requirements for insurers' corporate governance system. The Central Bank of the Russian Federation plans to strengthen the requirements for risk management.

Finally, the Central Bank of the Russian Federation will develop international recognition of the quality of Russian insurance and reinsurance protection. The regulator plans to establish interaction with companies from friendly countries to create a unified insurance infrastructure.^[1]

Growth in the number of property insurance companies by 4% to 82

In 2023, the number of property insurance companies in Russia reached 82. This is 4% more than in the previous year, when 79 organizations were engaged in such activities. After explosive growth in the 1990s, the Russian insurance market gradually consolidated, as stated in the BusinesStat review, published in early September 2024.

The study takes into account data on five main types of property insurance. These are agricultural insurance (insurance of crop crops, planting of perennial plantings, farm animals, commercial aquaculture facilities), cargo insurance, insurance of transport (cars, railway, air, water transport and other means), insurance of other property of citizens (buildings, household and other property) and insurance of other property of legal entities.

According to estimates, in 2019, 105 property insurance companies operated in Russia. In 2020, a decline of 13% followed - to 91 organizations, and in 2021 there was a reduction of another 5% with a final result of 86 companies. In 2022, a decrease of 8% was recorded. In general, in 2019-2023, the number of property insurance organizations in Russia decreased by 21.9%. Against this background, the remaining insurers were enlarged in terms of capital and in terms of insurance premiums. The main factors of consolidation were: structuring and complicating the requirements of regulators, reducing the profitability of the insurance business, as well as the need to cooperate with the banking sector, which prefers large insurance companies.

In 2023, he became the leading player in the market under consideration SOGAZ with a share of 17.6%. At the same time, the top 10 companies, including SOGAZ,,, Ingosstrakh AlfaStrakhovanie SK Sberbank insurance",,,, FRS SK," RESO-Garantiya the Rosgosstrakh Group, and, Renaissance Insurance SK "Consent" Tinkoff Insurance accounted for 85% of all insurance premiums under property insurance contracts.^[2]

Start of PSB Life Insurance

In July 2024, the Central Bank of the Russian Federation issued PSB Life Insurance licenses for the provision of services for voluntary life insurance and voluntary personal insurance. The company itself was registered in March 2024, its authorized capital - 450 million rubles. Read more here.

2023

The number of civil liability insurance contracts in Russia for the year increased by 21% to 75.2 million

In 2023, the number of concluded civil liability insurance contracts in Russia reached 75.2 million. This is 21% more compared to 2022, when their number was 62.3 million. Such data are given in the BusinesStat study, the results of which were published at the end of September 2024.

Various types of civil liability insurance are taken into account: the owner of a hazardous facility for causing harm as a result of an accident at this facility; vehicle owners; carrier for causing harm to life, health, property of passengers; organizations operating hazardous facilities, etc. Among the significant market players named "," "AlfaStrakhovanie Group," FRSRenaissance Insurance"," Ugoria Group of Insurance Companies"," "," "," "Zetta InsuranceIngosstrakh Russian RESO-Garantiya Insurance Company" Euroins, "SAK, Energogarant SC" AstroVolga, "SC" Gaide, "SC" Helios, "SC, SC," " "Twenty-First Century" SC," "etc RosgosstrakhSberbank insurance.

According to estimates, in 2019, 52.7 million civil liability insurance contracts were concluded in Russia. A year later, their number decreased by 3.4% - to 50.9 million. The COVID-19 pandemic has had a significant impact on the market. Restrictions on movement and quarantine measures led to a sharp decrease in passenger traffic, which negatively affected the demand for vehicle insurance. However, the suspension or slowdown of construction projects also reduced the need for civil liability insurance for contractors and builders.

In 2021, against the background of weakening quarantine restrictions, the industry returned to growth, showing an increase of 25.4% - up to 63.8 million concluded contracts. But in 2022, a decline of 2.4% was recorded due to general economic uncertainty, rising inflation and prices.^[3]

The car insurance market in Russia for the year grew by 20% to 595.1 billion rubles

In 2023, premiums under insurance contracts for vehicle owners (OSAGO and CASCO) in Russia reached 595.1 billion rubles. This is 20% more compared to 2022, when the figure was 495.9 billion rubles. Such data are given in the BusinesStat study, the results of which were published in mid-September 2024.

According to estimates, in 2019 the volume of the industry under consideration in the Russian Federation was 385.5 billion rubles. In 2020, an increase of 2.6% followed - to 395.4 billion rubles, and in 2021, an increase of 9.4% followed with a final result of 432.6 billion rubles. In 2022, the Russian car insurance market grew by another 14.6%. The key players are, Absolute Insurance,, AlfaStrakhovanie FRS Group, Renaissance Insurance Group,,, insurance companies "Ugoria" SAK "Ingosstrakh" RESO-Guarantee Energogarant, SK, SK Gaide, Astro-Volga SK Helios, SK, SK SK, "Twenty-First Century"Rosgosstrakh SK, SK,, and Sberbank insurance. "Consent" Sovcombank Insurance SOGAZ Tinkoff Insurance

It is noted that one of the main growth factors in 2023 was an increase in sales of passenger cars by 69% compared to 2022 - from 0.63 million to 1.06 million units. The expansion of the supply of Russian and Chinese models after the departure of international brands contributed to the recovery of the industry. The share of cars purchased on credit also increased: in accordance with the requirements of banks, CASCO insurance is issued during car loans.

The growth in turnover in the OSAGO segment was facilitated by an increase in the average cost of the policy due to the rise in price of auto parts and the increase in the cost of insurance protection by insurers. In 2023, the average annual premium on OSAGO policies increased by 15%. In general, in 2019-2023, premiums under insurance contracts for vehicle owners in Russia increased by 54.4%.^[4]

The investment life insurance market in Russia for the year grew by 52% to 775 billion rubles

In 2023, the volume of premiums under life insurance contracts in Russia reached 775 billion rubles, which is 52% more compared to 2022. At the same time, the maximum increase in contributions was recorded in the investment insurance sector - plus 76% on an annualized basis. The market was actively recovering from a fall in 2022 due to the restriction of investment opportunities of insurers due to the imposition of sanctions and a decrease in profitability on ILI policies. This is stated in the BusinesStat study, the results of which were released in early September 2024.

According to estimates, in 2019 the volume of premiums under life insurance contracts in the Russian Federation amounted to 409 billion rubles. In 2020, an increase of 5% followed - up to 431 billion rubles. In 2021, an increase of 22% was recorded with a final result of 524 billion rubles. However, in 2022 there was a decline of 2% - to 511 billion rubles.

The study says that in 2023, insurance companies began offering investment insurance products updated taking into account sanctions restrictions. They are aimed at securities of Russian issuers, as well as to the markets and currencies of Asian countries. The growing interest in investment insurance is caused by the expectation of high returns as the Russian stock market revives.

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At the end of 2023, the volume of the insurance market in Russia reached 2.3 trillion rubles, which is 25.8% more compared to 2022. At the same time, the number of insurance organizations on an annualized basis decreased by 8 companies - to 132 units. Such data are given in the report of the Bank of Russia, published on March 15, 2024.

It is noted that in 2023 the net profit of Russian insurers increased almost 2 times compared to the previous year, reaching 322.3 billion rubles. Such dynamics are provided mainly by the results of investment activities - primarily due to the positive revaluation of assets denominated in foreign currency, against the background of the weakening of the ruble. In 2022, insurers received a loss on these operations.

In 2023, the results of operations with financial instruments improved. This is due to the recovery of the stock market after falling in 2022. As a result of an increase in interest rates in the economy in 2023, the interest income of insurers also increased. The return on assets amounted to 6.5% (plus 2% compared to 2022), the return on capital - 24.8% (plus 5.2% year-on-year).

The study also notes that the total capital of insurers in 2023 reached 1.4 trillion rubles (plus 23.9% compared to 2022). The amount of insurance reserves is estimated at 3.3 trillion rubles (plus 12.1% year-on-year). Regulatory capital amounted to 1.1 trillion rubles, while the total assets of insurers in 2023 increased by 14.6% - to 5.3 trillion rubles.

The drivers of the growth of the Russian insurance market in 2023 in the category of "life insurance" were all the main types, including investment, savings and credit insurance. In other types of insurance, growth was based on car insurance. In particular, in the OSAGO segment, contributions increased by 18.8% - to 324.4 billion rubles, and the number of contracts rose by 3%. The volume of auto insurance premiums in 2023 increased by 21.4% - to 270.6 billion rubles.^[5]

Total payments of Russian life insurers increased by a third to 465.1 billion rubles

The total payments of Russian life insurers for 2023 increased by a third (by 32.3%) compared to a year ago - to 465.1 billion rubles. This is evidenced by the data of the All-Russian Union of Insurers (ARIA), published in mid-February 2024.

According to Interfax with reference to the President of the BCC Yevgeny Ufimtsev, the total premiums of Russian life insurers for 2023 reached 813.2 billion, an increase of 51.8% compared to 2022. Premiums on investment life insurance (ILI) at the end of 2023 increased by 75.7%, to 207.9 billion rubles. Premiums for funded life insurance (NSJ) increased by 41.4%, to 352.1 billion rubles, premiums for credit life insurance of borrowers increased by 50.8%, to 205 billion rubles.

Total payments of Russian life insurers in 2023 increased by a third

The level of market concentration for premiums has increased again - insurers from the top 10 account for 92.2% of all premiums collected for 2023. Sberbank Life Insurance remains the leader in the life insurance market (35% share). Then comes AlfaStrakhovanie (21% share) and SOGAZ-Life (9%). BCC statistics are given taking into account the data of 21 life insurers, which in total account for almost 100% of all fees in the segment.

The number of existing life insurance contracts in 2023 increased by 16%, to 18.6 million. The number of insured events in 2023 increased by 20% and reached 3.6 million. According to SCS estimates, the insurance regulatory reserves of life insurers as of December 31, 2023 amounted to 1.48 trillion rubles, showing an increase of 1.2%. A year earlier, the amount of insurance reserves was 1.46 trillion rubles.

According to Evgeny Ufimtsev, the growth of premiums was higher than the expectations of insurers, indicating that "life insurers offer products in demand by citizens with high customer value."^[6]

2022

Cargo insurance became the fastest growing segment in the market

Cargo insurance in 2022 became the fastest growing segment in the Russian market. This is evidenced by the data of the National Rating Agency (NRA), which were released in April 2023.

According to Kommersant, citing NRA materials, fees in the cargo insurance segment in 2022 amounted to 29.5 billion rubles, which is 22% more than a year ago, which was facilitated by the transition of business to Russian insurers from foreign ones.

New logistics chains are formed on the basis of a decrease in cargo turnover with unfriendly countries and an increase in traffic with eastern partners, explains Tatyana Nikitina, senior director of ratings for NRA financial companies. The top three in terms of fees included Independent Insurance Group (4.9 billion rubles), Ingosstrakh (4.7 billion rubles) and Renaissance Insurance (3.8 billion rubles).

As the head of the cargo insurance department of Ingosstrakh, Roman Golubev, said, a business that was traditionally located in foreign insurance companies entered the Russian market. Previously, all raw materials were insured in the foreign market, but now they are insured in Russian companies, and reinsured in, state RNPK said Marina Zyuganova, managing director of the underwriting department of property types of insurance of legal entities Renaissance Insurance. Innokenty Lukyanov, general director of the AST risk consultant, emphasizes that the RNPK determines the conditions for all insurers, which immediately affects the growth of the insurance rate and the conditions for taking risk.

At the same time, the segment remains the least unprofitable (the ratio of payments to collected premiums) for insurers. Moreover, in 2022, the volume of payments almost halved, to 4 billion rubles, due to the lack of large insurance cases, they say in the NRA.^[7]

Market leaders named

On March 20, 2023, the Expert RA rating agency published a study of the Russian insurance market and named its largest players. The leaders in the total volume of collected insurance premiums in 2022 were Sogaz (15.8%), Sberbank Life Insurance (8.5%) and Ingosstrakh (8.4%).

As follows from the data of Expert RA, in 2021 Ingosstrakh ranked fourth in terms of total insurance premiums, to which AlfaStrakhovanie has now moved. The positions of Sogaz and Sberbank Life Insurance in 2022 remained at the level of 2021.

Sogaz Joint-Stock Company, Sberbank Life Insurance and AlfaStrakhovanie-Life Limited Liability Company are leading in the voluntary insurance segment. The largest companies in the segment of compulsory insurance are RESO-Garantia, Ingosstrakh and AlfaStrakhovanie.

The top three in terms of life insurance premiums in 2022 included Sberbank Life Insurance, AlfaStrakhovanie-Life and Sogaz-Life.

According to experts, the ratings are compiled on the basis of statistical indicators disclosed by the Bank of Russia and information about certain subjects of insurance business and reflect the positions of companies on insurance premiums, payments, insurance amounts under insurance contracts, as well as indicators of the reinsurance market.

According to the Central Bank of the Russian Federation, fees in the segment of non-bank life insurance - investment and savings - practically did not change and in 2022 amounted to 366.2 billion rubles. At the same time, contributions to investment life insurance (ILI), which for many years remained a growth driver for the entire insurance industry, almost halved, to 118.3 billion rubles, due to a reduction in supply by market participants. Contributions on funded life insurance (NSF), on the contrary, increased by almost 60%, to 247.9 billion rubles.^[8]

Decrease in the profit of insurance companies by 17.3% to 202.6 billion rubles

The profit of Russian insurers before tax in 2022 amounted to 202.6 billion rubles, having decreased by 17.3% compared to 2021. The Central Bank of the Russian Federation announced this in mid-March 2023 in its study.

It said the profits of insurance companies fell due to a decline in profits from investment activities, primarily due to operations with financial instruments and foreign currency.

The increased volatility of the Russian financial market, as well as a decrease in the value of foreign securities, investments in which formed the basis of the portfolio of investment life insurance (ILI) programs, led to losses from transactions with financial instruments, the Central Bank notes.

The reason for the losses on foreign currency assets, according to the review, was their negative revaluation due to the strengthening of the ruble.

Шаблон:Quote 'The decrease in profits from investment activities was mainly due to the deterioration of the indicators of life insurers, which at the same time made the main contribution to improving the results of insurance operations, - explains the regulator. According to him, the volume of insurance premiums increased in 2022 by 0.5% - to 1.8 trillion rubles - compared to 2021 and amounted to 1.2% of GDP (1.3% of GDP in 2021). Over the past year, the dynamics were multidirectional and largely reflected changes in economic activity: the volume of collected premiums fell sharply in the second quarter of 2022.

Payments under insurance contracts in 2022 increased by 12.1% compared to 2021 - to 893.2 billion rubles. Such an increase was caused by inflation (for example, in the segments of auto insurance and VHI) and an increase in the number of insured events in certain segments, the regulator explains. According to the Central Bank, payments have risen in all major insurance segments.

Overview of Key Performance Indicators of Insurers in 2022

2020

Premiums of car insurers 231.7 billion rubles, payments - 135.8 billion

In 2020, according to the Union of Auto Insurers, 231.7 billion rubles of insurance premiums were received, and insurance payments were carried out for 135.8 billion rubles. The ratio of insurance payments to insurance premiums for OSAGO in Russia as a whole in 2020 amounted to 58.6%. Thus, in 2020, more than 42.6 billion rubles remained with insurance companies.

"There is no economic justification in expanding the tariff corridor," said Anton Shaparin, president of the National Automobile Union, member of the public council of the Main Directorate of the Ministry of Internal Affairs in Moscow.

Over 10 thousand statements on the facts of fraud were sent by insurers to the police

According to the All-Russian Union of Insurers, in 2020, insurance companies sent more than 10 thousand applications to law enforcement agencies with signs of insurance fraud, while the amount of claimed damage amounted to more than 5.5 billion rubles. This became known on March 29, 2021.

Most of the applications for OSAGO were sent - 89% - while the amount of claimed damage amounted to more than 2.7 billion rubles. For other types of insurance, the number of sent applications is significantly less and amounted to 11% of the total number of sent applications to law enforcement agencies, while the amount of claimed damage for them amounted to 2.8 billion rubles.

The efforts that are jointly made by the state, law enforcement agencies, the Central Bank of Russia, as an industry regulator and insurance companies, are bearing fruit. In some regions, which are especially affected by the actions of insurance fraudsters, they have introduced financial education programs for the population on insurance issues, including those related to countering insurance fraud. These programs help citizens to better understand financial issues and not become a victim of unscrupulous businessmen. We have launched unified information bases (Bureau of Insurance Histories and AIS OSAGO), which allow you to quickly exchange information between all market participants. The security services of insurance companies have been strengthened, which identify some of the potential fraudsters even before the conclusion of the insurance contract.

As Andrei Krupnov, head of the committee for quality control of products and services in the field of insurance of the Association of Consumers of Russia, notes, many innovations in the field of combating fraud come from the technological sphere:

Special big data processing tools allow you to trace connections between participants in various insurance contracts and insured events (including insurers, victims, witnesses, agents, etc.) and identify contacts that simply cannot be seen with the naked eye. In addition, scoring systems allow you to assess the potential client's tendency to fraud and weed it out at the stage of concluding an agreement (or, if this is impossible, as in the case of OSAGO, take it under special control). Risk monitoring and predictive analytics systems allow you to catch the moment when a "white" client turns into an accomplice of fraudsters or isolate a suspicious one from the general flow of insurance cases and give an appropriate warning to employees of the UK. Moreover, such analytical tools work even on the newest fraud schemes, thus saving insurers from financial losses.

In 2020, compared to 2019, the number of applications to law enforcement agencies decreased by more than two thousand, which is associated with the pandemic, including measures aimed at countering insurance fraud. In addition, according to the President of the Russian Union of Auto Insurers Igor Yurgens, court appeals decreased by 64%, as there is a pre-trial procedure for circulation and many issues are resolved through the Financial Ombudsman.

The Bank of Russia listed the main threats to the insurance business posed by climate change

Insurance organizations are most susceptible to climate risks among all financial organizations due to the specifics of their business, according to a report for public consultations prepared by the Bank of Russia on the impact of climate risks.

Firstly, Russian insurers, like any investors, may face an impairment of their investments. A company (investee) may be subject to a natural disaster caused by climate change, which will lead to an impairment of its shareholder value or a default on securities. In addition, investments in non-ecological sectors of the economy may become less profitable due to the adoption by society of measures aimed at developing alternative energy sources and combating environmental pollution.

Main article: Climate of Russia

2018: Insurance market to grow by 10 - ​15% in 2018

The All-Russian Union of Insurers (ARIA) predicts in December 2017 the growth of the insurance market in 2018 by 10 - 15% compared to 2017. Such data were provided by the President of the BCC Igor Yurgens.

According to the SCC, in 2017 the market will grow by 9-11% - to 1.22 trillion rubles. And in 2018, the absolute market indicator may reach 1.4 trillion.

"According to the SCC forecast, growth will be facilitated by some stabilization of the economic situation in the country. The growth driver will still be life insurance, which will increase by about 50-55%. The personal insurance sector can demonstrate positive dynamics in the amount of about 5-10 %. Property insurance, at best, will demonstrate weakly positive dynamics in the amount of 1-2%, "the release says

.

Casco will demonstrate a slightly negative trend in the amount of about 2-3%, and OSAGO will remain either at the level of 2017, or show a slight minus, reports ASN.

2017

RAEX: Bank Insurance Market

Sales of insurance products through the banking channel are growing at an extremely high rate, in contrast to the growth rate of the entire insurance market. For 2017, the increase in contributions on bank insurance amounted to 45.6%, while the insurance market grew by only 8.3%. Therefore, the bank sales channel is becoming more and more significant, its share in total contributions increased to 37.8% in 2017. The reason for this rapid growth remains the active promotion by the largest investment life insurance banks, which is often positioned in sales as a more profitable alternative to deposits. The decrease in interest rates on loans also had a significant impact, which led to an increase in credit insurance, in particular, insurance of the life and health of borrowers of consumer loans. At the same time, the commission on banks for promoting insurance products also began to grow, but its growth is noted only in credit insurance. The concentration of insurers associated with banks increased in the bank insurance market to 66% in 2017. According to the forecast of the Expert RA agency, the bank insurance market in 2018 will continue to grow by about 37% due to its main drivers - ILI (about 50-53%) and insurance of the life and health of borrowers of consumer loans (+ 40%).

The share of bank insurance in the insurance market reached 37.8% in 2017. Contributions received through the bank sales channel increased by 45.6% in 2017 and amounted to 483 billion rubles. At the same time, the share of bank insurance in the total insurance market increased in 2017 by 9.7 pp, to 37.8%. The main drivers of the growth of the bank insurance market are investment life insurance, which provided 61% of the absolute increase in bank insurance contributions for 2017, and life and health insurance for consumer loan borrowers, which brought 21% of bank insurance contributions. Credit insurance has ceased to play a major role in bank insurance, its share decreased to 42.5% in 2017, and the share of non-bank bank insurance, on the contrary, increased to 55.7%.

The share of insurance companies associated with banks increased to 66%. The concentration in the bank insurance market continues to gradually increase, in 2017 the share of the three largest insurers increased by 1 pp and amounted to 48%, the share of the top 10 insurers - by 2 pp, to 72%. The share of insurance companies associated with banks increased by 2 pp in 2017 and amounted to 66%. The official fee paid by insurers to banks to promote insurance products has increased significantly in credit insurance, while in non-credit insurance the fee remains at a moderately low level. The highest growth and size of the commission are noted in insurance against NS and diseases, in 2017 it increased by 11 pp and amounted to 55% of the corresponding contributions. The lowest fee is in non-bank life insurance (13% for 2017).

Investment life insurance determines not only the growth of the bank insurance market, but also the insurance market as a whole. In 2017, the volume of ILI reached 193 billion rubles, and its increase remains extremely high - 93%. Also, a significant share in non-bank insurance in 2017 was occupied by mixed life insurance, the volume of which amounted to 39.7 billion rubles, an increase of 20.3%, and property insurance of individuals - 17 billion rubles and 19.7%. In the segment of personal credit insurance, the largest area is still insurance of the life and health of borrowers of consumer loans (98 billion rubles), which increased by 48.3% in 2017. The volume of mortgage insurance amounted to 31.1 billion rubles (+ 19.6%), borrower insurance against job loss - 21.7 billion rubles (+ 19.2%), auto insurance - 15.4 billion rubles (+ 33.9%).

In property insurance of borrowers of legal entities and in risk insurance of banks, there is a drop. Insurance property of borrowers of legal entities, including collateral, goods in stock, goods in circulation, showed negative dynamics in 2017 (-9.5%) and amounted to 9.5 billion rubles. At the same time, high growth rates in 2017 are shown by such areas as life and health insurance for small and medium-sized business owners, including individual entrepreneurs (70%) and agricultural insurance of borrowers (33.3%), but their volume remains low - 1.7 and 1.2 billion rubles, respectively. In 2017, banks' own risk insurance recorded a drop in all areas: insurance of specific risks banks(BBB, ATM insurance, D&O insurance, insurance of bank card issuers) decreased by 20%, to 1.2 billion rubles, insurance of bank property (fleet, real estate) - by 30.8%, to 0.9 billion rubles, insurance of bank employees (VHI, NS, life and health insurance) - by 37.8%, to 5.6 billion rubles.

The bank insurance market will increase by 37% in 2018. According to the forecast of RAEX (Expert RA), the bank insurance market at the end of 2018 will amount to 662 billion rubles. The main impact on the market volume will be provided by investment and mixed life insurance, as well as insurance against NS and diseases in consumer lending and mortgage insurance. Investment life insurance in 2018 will amount to 295 billion rubles (+ 53%), mixed life insurance - 47 billion rubles (+ 18%). The restoration of consumer activity and a decrease in interest rates on loans will lead to an increase in insurance of the life and health of the borrower of consumer loans up to 137 billion rubles (+ 40%), mortgage insurance - up to 39 billion rubles (+ 25%), car insurance - up to 20 billion rubles (+ 30%) for 2018. Credit insurance of legal entities will not change significantly and will amount to 15 billion rubles (+ 2%) for 2018, and bank risk insurance will be reduced by 15% due to a reduction in the number of banks and cost optimization.

RAEX: Non-life insurance - worse than expected

Non-life insurance at the end of 2017 lost more than 17 billion rubles of premium, the fall in contributions occurred in three of its five largest segments. The stagnation in OSAGO and the continuing trend towards a reduction in auto insurance premiums will put pressure on the market in 2018. The non-life market will be supported by the consistently high growth rates of premiums on property insurance of citizens, the expected acceleration of growth in the VHI segment and the restoration of the market for property insurance of legal entities. At the same time, excluding life insurance in 2018, the non-life market will grow by no more than 3-4%, to the level of 980 billion rubles. The life insurance segment will demonstrate the highest growth rates in contributions - about 30%, reaching 430 billion rubles. According to the forecast of RAEX (Expert RA), the insurance market in 2018, taking into account life insurance (non-life + life), will grow by 10-11%, to 1.4 trillion rubles^[9]

At the end of 2017, the non-life market decreased by 1.8%. In absolute terms, the insurance market (non-life + life) added 98 billion rubles, while almost 116 billion rubles of this increase was provided by the life insurance segment. Thus, non-life insurance lost more than 17 billion rubles in premium. At the end of 2017, compared to 2016, the growth rate of the insurance market (non-life + life) amounted to 8.3%, its total volume reached 1,279 billion rubles.

The reduction in premiums occurred in three of the five largest non-life segments. The largest drop in contributions in 2017 was observed in OSAGO (-5.2%, or -12.3 billion rubles in absolute terms), insurance of auto insurance (-4.8%, or -8.2 billion rubles) due to a decrease in the cost of policies with deductibles and truncated programs, insurance of other property of legal entities (-10.7%, or -11.5 billion rubles) due to correction after the rapid growth of 2016. In addition, there is a significant reduction in agricultural insurance premiums (-60.1%, or 5.9 billion rubles) as a result of a decrease in state support. The most positive dynamics among non-life segments was shown by accident and disease insurance (+ 12.3%, or + 13.3 billion rubles in absolute terms), insurance of other property of citizens (+ 11.6%, or + 6.0 billion rubles) and financial risk insurance (+ 25%, or + 5.3 billion rubles) due to the revival in the consumer lending market and tourist flow, as well as the promotion of boxed products by banks.

The only driver of the entire insurance market is life insurance, namely its separate segment - investment life insurance. This led to a reshuffle among the leaders of the insurance market. So, at the end of 2017, the life insurance company took 2nd place, rising from 5th place in 2016. The top 10 now includes three life insurers against two a year earlier. And although the number of life insurance companies in the twenty largest insurance players in premiums for 2017 increased slightly (eight instead of seven in 2016), only those of them who actively promoted ILI in the year ended were in the list of the top 20 markets. There are no changes in the top 5 in life insurance premiums in 2017 compared to 2016 due to the fact that all segment leaders demonstrate consistently high growth rates of premiums.

According to the forecast of RAEX (Expert RA), the insurance market in 2018, taking into account life insurance (non-life + life), will grow by 10-11%. Its volume will overcome the mark of 1.4 trillion rubles. The life insurance segment will show the highest growth rates in contributions, about 30%, reaching 430 billion rubles. The high growth rate of life insurance premiums will be supported by intensive sales of investment life insurance by credit institutions. The reduction in deposit rates will further contribute to the spread of ILI. At the same time, changes in the regulation of this segment are not excluded, which can significantly change its dynamics. Cumulative life insurance and credit life insurance will grow at a relatively lower rate (+ 15 and + 8-10%, respectively).

Excluding the life insurance market in 2018, due to the lack of other drivers, the non-life market will show an increase of no more than 3-4% to the level of 980 billion rubles. Auto insurance will continue to reduce premiums (-2--4%) as a result of a decrease in the average cost of the policy due to deductibles and tariff options, as well as the lack of growth in real incomes of the population. Due to the lack of an increase in tariffs in OSAGO, stagnation will be observed. The fall in loan rates and the revival of the tourist flow will support insurance against accidents and diseases (the growth rate of premiums will be 7-8%). Voluntary health insurance in 2018 will grow by 10-12% due to the development of boxed products, the distribution of insurance programs against critical diseases, as well as annual inflation of the cost of services of medical institutions; insurance of other property of citizens (+ 12-14%) - thanks to boxed products and housing insurance programs. For insurance of other property of legal entities, the market is expected to recover (+ 10-12%) after falling in 2017.

Charts and Tables

Table 1. Forecast of the dynamics of the insurance market and its individual segments

Наименование сегмента	Взносы, 2016 г., млрд руб.	Взносы, 2017 г., млрд руб.	Темпы прироста взносов, 2017 г. / 2016 г., %	Взносы, 2018 г., млрд руб. (прогноз)	Темпы прироста взносов, 2018 г. / 2017 г., % (прогноз)	Факторы, влияющие на динамику
Страхование жизни	216	332	53,7	430	30	Интенсивные продажи ИСЖ кредитными организациями; снижение ставок по депозитам.
ОСАГО	234	222	-5,2	222	0	Стагнация из-за отсутствия повышения тарифов.
Страхование автокаско	171	162	-4,8	158	-2–-4	Положительное влияние: повышение доступности страхования автокаско в результате внедрения франшиз и применения дополнительных тарифных опций; постепенное восстановление объемов продаж новых автомобилей и оживление на рынке потребительского кредитования. Negative impact: reduction of the average cost of the policy due to deductibles and tariff options; lack of growth in real incomes of the population.
Добровольное медицинское страхование	138	140	1,6	155	10–12	Драйверы роста: распространение программ страхования от критических заболеваний; инфляции стоимости услуг лечебных учреждений.
Страхование от несчастных случаев и болезней	108	121	12,3	130	7–8	Положительное влияние: падение ставок по кредитам; оживление туристического потока. Negative impact: lack of growth in real incomes of the population.
Страхование прочего имущества юридических лиц	107	96	-10,7	105	10–12	Восстановление рынка после падения в 2017 году.
Страхование прочего имущества граждан	51	57	11,6	65	12–14	Драйвер роста: коробочные продукты, программы страхования жилья.
Страховой рынок (non-life + life)	1 181	1 279	8,3	1 410	10–11
Non-life-страхование	965	947	-1,8	980	3–4

Source: RAEX (RA Expert)

Table 2. Changes in the top five market leaders in premiums in certain segments of the insurance market

Место в рэнкинге	Топ-5 лидеров рынка, 2017 г.	Топ-5 лидеров рынка, 2016 г.
1	«СОГАЗ»	«СОГАЗ»
2	«СБЕРБАНК СТРАХОВАНИЕ ЖИЗНИ»	«РОСГОССТРАХ»
3	«РЕСО-ГАРАНТИЯ»	«РЕСО-ГАРАНТИЯ»
4	«ВТБ СТРАХОВАНИЕ»	«ИНГОССТРАХ»
5	«ИНГОССТРАХ»	«СБЕРБАНК СТРАХОВАНИЕ ЖИЗНИ»
MTPL
1	«РЕСО-ГАРАНТИЯ»	«РОСГОССТРАХ»
2	«РОСГОССТРАХ»	«РЕСО-ГАРАНТИЯ»
3	«ИНГОССТРАХ»	«ИНГОССТРАХ»
4	«ВСК»	«ВСК»
5	«АЛЬФАСТРАХОВАНИЕ»	«АЛЬФАСТРАХОВАНИЕ»
Ground transport means insurance
1	«ИНГОССТРАХ»	«ИНГОССТРАХ»
2	«РЕСО-ГАРАНТИЯ»	«РЕСО-ГАРАНТИЯ»
3	«РОСГОССТРАХ»	«РОСГОССТРАХ»
4	«ВСК»	«ВСК»
5	«АЛЬФАСТРАХОВАНИЕ»	«СОГЛАСИЕ»
Life insurance
1	«СБЕРБАНК СТРАХОВАНИЕ ЖИЗНИ»	«СБЕРБАНК СТРАХОВАНИЕ ЖИЗНИ»
2	«РОСГОССТРАХ-ЖИЗНЬ»	«РОСГОССТРАХ-ЖИЗНЬ»
3	«АЛЬФАСТРАХОВАНИЕ-ЖИЗНЬ»	«АЛЬФАСТРАХОВАНИЕ-ЖИЗНЬ»
4	«РЕНЕССАНС ЖИЗНЬ»	«РЕНЕССАНС ЖИЗНЬ»
5	«ВТБ СТРАХОВАНИЕ ЖИЗНИ»	«ВТБ СТРАХОВАНИЕ ЖИЗНИ»
VHI
1	«СОГАЗ»	«СОГАЗ»
2	«РЕСО-ГАРАНТИЯ»	«РЕСО-ГАРАНТИЯ»
3	«АЛЬФАСТРАХОВАНИЕ»	«АЛЬЯНС ЖИЗНЬ»
4	«ИНГОССТРАХ»	«АЛЬФАСТРАХОВАНИЕ»
5	«АЛЬЯНС ЖИЗНЬ»	«РОСГОССТРАХ»
Insurance of other property of legal entities
1	«СОГАЗ»	«СОГАЗ»
2	«ИНГОССТРАХ»	«КАПИТАЛ СТРАХОВАНИЕ»
3	«АЛЬФАСТРАХОВАНИЕ»	«ИНГОССТРАХ»
4	«ВТБ СТРАХОВАНИЕ»	«АЛЬФАСТРАХОВАНИЕ»
5	«РЕСО-ГАРАНТИЯ»	«ВТБ СТРАХОВАНИЕ»
Insurance of other property of individuals
1	«РОСГОССТРАХ»	«РОСГОССТРАХ»
2	«СБЕРБАНК СТРАХОВАНИЕ»	«СБЕРБАНК СТРАХОВАНИЕ»
3	«ВТБ СТРАХОВАНИЕ»	«ВТБ СТРАХОВАНИЕ»
4	«РЕСО-ГАРАНТИЯ»	«РЕСО-ГАРАНТИЯ»
5	«АЛЬФАСТРАХОВАНИЕ»	«АЛЬФАСТРАХОВАНИЕ»
Insurance against NS and diseases
1	«ВТБ СТРАХОВАНИЕ»	«ВТБ СТРАХОВАНИЕ»
2	«ВСК»	«СТРАХОВАЯ КОМПАНИЯ «КАРДИФ»
3	«АЛЬФАСТРАХОВАНИЕ»	«АЛЬФАСТРАХОВАНИЕ»
4	«СТРАХОВАЯ КОМПАНИЯ «КАРДИФ»	«РОСГОССТРАХ»
5	«СОГАЗ»	«СОГАЗ»

Source: RAEX (RA Expert), according to companies

2012: Foreign insurers return

On June 27, 2012, the international network of KPMG companies presented the results of a study of the insurance market in Russia in 2012.

"The prospects for the long-term growth of the insurance market in Russia attract investors: in 2012, interest from well-known foreign insurance companies returned. Russian insurers in the M&A market also continue to be active. The upcoming transition to IFRS in accordance with the law on consolidated financial statements is a significant transformation towards increasing the transparency of the insurance industry, "said Adrian Quinton, partner, head of insurance practice and the KPMG Actuarial Services Group in Russia and the CIS

.

Market Trends and Development Prospects

• The historical average annual growth of the insurance market in 2010-2011 was more than 10%, which gave optimism to market participants in 2012. Most of them plan to continue to concentrate on the growth of premiums and an increase in profitability following the growth of the market.

• Market-wide trends towards increasing concentration and increasing market share of the Top 10 companies are expected to continue, which is in line with the previous trend. However, the current growth optimism is based on the expectation of general economic growth in the Russian Federation, which may not materialize (the current forecast for GDP growth is less than 4%).

• Both historically and according to the results of the study, a significant factor in growth is state support for the industry in the form of the introduction of mandatory types of insurance, such as hazardous facility insurance.

• Motor insurance continues to be a priority for all market participants, and this attitude is supported by the projected growth of lending at the level of 20-25% and a significant growth in the fleet.

• In addition, the life insurance market is showing great hopes, but its competitiveness and further growth are closely related to changes in tax legislation.

• Despite high fees to banks and dealers, insurance companies intend to increase sales through these channels, paying moderate attention to the development of direct sales.

Improving the efficiency of insurance companies, the role of IT

• Despite the importance of automation, most companies do not plan to increase spending on IT systems, intending to leave them at the level of the previous year. However, the focus in 2012 is shifting to a customer relationship management (CRM) system.

• Business costs and aquisional costs remain a priority in terms of cost management by insurance companies as the main measures to improve profitability. At the same time, the assessment of insurance risk (which was noted as a priority 50% of respondents in 2011) faded into the background.

• In terms of reducing business costs, the main measures that companies will use in 2012 are called centralization of functions and optimization of personnel costs.

• The increase in aquizational expenses is associated with an aggravation of competition in the market, an increase in agency rewards and an increase in the share of the banking sales channel. However, proposed measures, such as optimizing partner relationships and developing direct sales, may either fail to deliver the expected results due to the presence of a sufficiently strong position among partners, or require additional investment in infrastructure, which will also create additional pressure on the profitability of the business.

• In general, building relationships with partners and reducing the level of fraud are called the most priority measures to reduce the loss-making of the insurance business. However, if the first measure may not be effective due to the strong market position of intermediaries, then the second one looks contradictory due to the fact that the assessment of insurance risk in 2012 is not paid as much attention as expected.

• Managers do not predict a significant decrease in loss-making in the main types of insurance, with the exception of OSAGO, which is expected to improve profitability due to tariff adjustments.

Law and IFRS Overview

• KPMG's research shows that the insurance market is most in need of transforming legislation and supervisory functions in the areas of capital adequacy, combating fraud and building equal relations with intermediaries.

• The mandatory transition to IFRS, in which all insurance companies are required to report in accordance with the International Financial Reporting Standards starting in 2012, is seen by insurers as a progressive market change that will benefit all interested parties.

Market and M&A Dynamics

• As noted earlier, the majority of survey participants expect in 2012 an increase in the market share of companies in the Top 10 by more than 2% compared to the previous year. This growth will occur both organically, due to the competitive advantages created by these companies (such as a brand or an advanced branch network), and due to mergers and acquisitions.

• In addition, many players expect more than one deal at the level of large insurance companies. These transactions can be both domestic and international in nature. In addition, more than a third of the participants expect new foreign players to appear on the market due to the attractiveness of the Russian market and the expected increase in the quota for foreign capital. At the same time, revoking licenses from any of the major market participants this year seems unlikely to most of those surveyed.

• Executives' expectations about the value of the Top 10 insurance companies have grown more than for the rest of the players, which is explained by the relative weakening of the market positions of non-Top 10 companies.

All of the above events can lead to increased competition, which will create additional pressure on the profitability of the business.

2011: Russia is one of the fastest growing insurance markets in the world

In 2011, the insurance market in Russia grew significantly, making it one of the fastest growing insurance markets in the world. The recovery of the Russian economy had a positive effect on the growth of demand for non-business insurance products, and the increase in lending volumes contributed to the growth of the life insurance market.

See also

• Green card (insurance)
• InsurTech - Information Technology and Digitalization in Insurance (Cyber Insurance and Telematics Data)

Notes