XPRIMM: What is the main trend of development of the motor insurance segment for the current year in Russia?
Igor YURGENS: There is a substantial reforming of the insurance sector in the whole system, in particular the restructuring of the MTPL insurance segment. Moreover, were expanded the compensation limits and increased the amount of the average payment. For example, analyzing the latest statistical data for the first eight months, we see that the average insurance premiums amounted to RUB 5.2 thousands, up by RUB 1.89 thousands. At the same time, the average insurance payments increased to RUB 45 thousands, up by RUB 10.48 thousands.

Another innovation is the introduction of the unique methodology for calculating damage. In order to reduce the number of litigations settled in a court between insurers and the MTPL clients, the order how to make complaints was introduced one year ago. Namely, if the insured does not agree with something they should address, primarily they complaint to the insurer. With the introduction of this order the number of litigations settled in a court has fallen twice: the insured does not want to be judged or to pay court fees, therefore most of the litigations are settled out of court. Briefly, the parties have learnt to come to a mutual agreement. The only problem area which remains are the complaints regarding the method of calculation for "bonus-malus" (not everything depends on the insurers, car owners sometimes make mistakes in providing data). But we are working on these issues. In our future plans was included the upgrading of the RAMI database, the further digitization and the development of the e-policy project and bureau for traffic accidents.

XPRIMM: In your opinion, with the gradual increase in MTPL tariffs, has the problem with the high loss ratio in this segment been solved?
Igor YURGENS: We believe that the "sum reserve" of the MTPL insurance tariff will be enough for a few years and the critical situation was overcame; now there is a restructuring of the MTPL insurance system on a qualitatively new level: the amendments to the Federal Law for MTPL insurance, that have been taken by reforming the system, mainly just in the interests of car owners.

A number of popular measures were introduced. Such measures include the increase in the compensation limits for life and health, the unlimited amicable settlement. Moreover, a unified method was developed for calculating damage, which will minimize the number of disputes between insurers and policyholders. RAMI also claimed responsibility for the obligations of bankrupt insurance companies. Namely, even if certain insurance companies left the market for some reason, their clients will still receive compensation in case of road accidents. The insurance community together with the authorities (the Central Bank of Russia, the State Duma of the Russian Federation) continues to work on the creation of MTPL products which are more useful, convenient and flexible. 

MTPL insurance became more fair and equitable. RAMI have successfully implemented an IT system that allows setting up the coefficient of "bonus-malus" under the MTPL contracts in the whole country. This measure will strengthen the fair and equitable MTPL payments and will avoid transferring obligations of unscrupulous drivers on disciplined drivers. Developed by RAMI and transport experts, the implementation of the unique methodology for calculating damage seriously reduces the possibility of scams and fraud motor-lawyers to speculate on the cost of real damage in arbitration courts. This will allow insurers to save hundreds of millions of rubles, without shifting the liability on honest policyholders.

XPRIMM: In Russia, the electronic MTPL system has begun working. How do you evaluate this breakthrough in the traditional system? What are the advantages and disadvantages of e-system?
Igor YURGENS: E-policy - this is just one area which is designed to increase the availability of MTPL insurance services and to stop the negative practices imposing additional services that had been placed earlier. Electronic MTPL insurance policy represents an alternative over the paper version of the policy. The implementation of this system allows solving several problems at once: the imposition of additional services, the access to policies in the regions, the remote sales offices in small towns, etc. This is a modern, widespread way to procure motor insurance policies without even leaving your computer.

Until now about 6,000 e-policies were sold, most of them in the region, meaning that the e-policy fulfilled its purpose - the availability of the service was increased exactly where needed. Today, the system is connected to 22 companies, 11 of which make sales. However, in the near future it is expected to increase the number of insurers that sell e-policies. Insurance companies are interested in this and are ready to deal with it seriously.

The central bank has made it clear to insurance companies: the sales through electronic policies are a sign of the trustworthiness of the company. And those insurers that have not sold e-policies will seek to start selling them in the near future. A major breakthrough in the system of e-policies will be on October 1st, when it will be possible to conclude a contract, even for those customers which are today on the way of changing an insurer. This is the main scope of the e-policy, not the extension itself which was not problematic. RAMI is getting it ready for October 1st. The system was tested. Everything is functional.

XPRIMM: How would you comment on the Motor Hull results? And what is the main tendency in this segment?
Igor YURGENS: The Motor Hull segment has shown disappointing results in the first half of 2015. The GWP on the Motor Hull segment decreased by almost 15%, the share of household spending for the Motor Hull policy decreased from 0.49% a year earlier to 0.37%. Moreover, the ratio of Motor Hull premiums in GDP fell to 0.26% compared with 0.32% last year. I believe that this is directly linked to the fall of the purchasing power of the population, which resulted in the 36.5% reduction in new car sales in the second quarter.

XPRIMM: What are your expectations for the end of 2015 regarding the motor insurance segment?
Igor YURGENS: Positive expectations can be seen so far only in the technological and institutional fields. The main tendencies towards the end of 2015 are the development of telematics solutions, which allow controlling the losses, as well as a gradual increase in the share of products with a franchise, the contributions to the cost reduction and the increase in online sales.

On the one hand, the insurance market is very dependent on the technological innovations; on the other hand, the market is traditionally more conservative than the banks and investment companies.

The long-awaited implementation of the e-policy and the development of online insurance services have taken a lot of time compared with the banking sector, where these processes have been much faster.

On the other hand, it is possible that the technological revolution on the insurance market begins, and its key driver will be not even the online sales channel and "packaged" products, but telematics solutions, and not only as a tool of analysis and loss control, but as the most important innovation in the management of clients database.

According to the statistics, the monitoring of the driving style of drivers, the impact analysis (in case of road accident) and other indicators can reduce the loss ratio by 15-20%. This can become the key moment for further development of motor, property and liability insurance of citizens in general.