Insurance

Bank of Russia resulted Russian auto market 2015

Bank of Russia, regulating insurers in Russia, provided analysis of 2015 results in Russian insurance market.

478 players only was left in 2015 on the Russian market – 70 lost licenses. The biggest 20 insurers take 77.5% of the market. Insurance premiums grew by 3.3%. Volume of insurance payments reached 1.3% of the country’s GDP (1’023.8 bln RUR).

Payments grew by 7.1% in 2014 up to 509.2 bln RUR. And quantity of contracts with private persons decreased by 10%, with companies – by 13.5%. Insurance fees count 19.6% of payments.

Late in 2015 insurers were oblidged to collaborate with depositories – special controlling units on the stock market – and to represent them documents on spendings. Until then insurers could manage money themselves. In 2015 main assets of the insurers (+5% to 2014, now it makes 2% from GDP or 1.6 trillion RUR) were following:

Name of insurer’s assets

Share in assets

Bank deposits

27.4%

Accounts receivable

19.0%

Corporate bonds

15.6%

Counter-insurance

8.0%

Cash

7.9%

Investments to shares

7.1%

State papers

6.4%

Real estate

5.1%

Others

3.5%

Totally

100.00%

Key insurance business in Russia focuses on life insurance, private medical insurance, auto insurance and company’s property insurance. Life insurance forms 129.7 bln RUR (growth +19% to 2014).

Core market driver and main segment of auto insurance is OSAGO (obligatory compulsory motor insurance), replacing Casco. Without OSAGO tariffs increase in 2014 the market would showed negative result, while in 2015 OSAGO was up 44% to 2014. Sales of polices through auto dealers decreased from 7.9% in 2014 to 6.3% in 2015.

In 2016 OSAGO market meets serious changes. Recently Russian Auto Insurance Union, agreed with dealers on prices and conditions, decided to change mode of OSAGO settling. Now instead of money passing to clients insurers will propose to go for repairing at dealership. For vehicles younger than 2 years official dealer will be recommended, for others – somewhat close.

Sources: Central Bank of Russia, Rossiyskaya Gazeta, Finmarket.