STATISTICS:

RNRC: The entire Russian market of inward reinsurance can grow to RUB 41-43 billion in 2017; RUB 7.5 billion in premiums expected in 2017 for the national reinsurer

The Russian National Reinsurance Company (RNRC) recently issued a comprehemsive report on the Russian reinsurance market's evolution in 2016. Please find below a summary of the main report's findings, together with the 2017 forecast, courtesy to RNRC.

At year-end 2016, the Russian reinsurance market has stabilized and showed positive dynamics. The volume of premiums transferred by Russian companies to reinsurance grew by 9.5% and reached RUB 132.1 billion, of which 85% were transferred to the international market, and 15% to the reinsurers of the Russian Federation.

Taking into account the RUB 16 billion of premiums on inward reinsurance from the international market, the total volume of premiums on inward reinsurance in Russia grew by almost 2% to RUB 35.9 billion, which is significantly less than in 2012-2014, when the market did not fall below RUB 42 billion (Figure 1).



The decrease in the volume of inward reinsurance occurred in 2015 due to a sharp reduction in the internal reinsurance market. This process was the result of withdrawal of a significant number of players from the market due revocation of licenses by the regulator.

At the same time, the market is left by reinsurance companies, for which it is difficult to compete with large Russian multiline companies, let alone foreign reinsurers. The low level of trust in national companies, low credit ratings, and direct insurance competition prevent Russian insurers from participating in placing the most interesting and lucrative risks in the territory of the Russian Federation.

The downgrade of the Russian Federation and the automatic lowering of all corporate ratings have limited the ability of Russian insurers to attract inward business in the international market. As a result, the number of players in the inward reinsurance market declined from 104 to 76 in 2015. In 2016 this process continued, and according to the results of the year, only 64 companies reflected inward reinsurance operations in their reports.

The growth in outward reinsurance is partly due to the 'preparation' of some companies for the start of the RNRC operation. In addition, there has been no major change in the outward reinsurance structure.

The share of reinsurance premiums transferred abroad is constantly growing. From 2012 to 2016, premiums transferred to the international market increased from RUB 79.4 billion to RUB 112.5 billion .

The growth of premiums transferred abroad was affected by cleaning of the domestic market in 2015, and the growth of transferred premiums in ruble terms due to the growth of foreign exchange rates. In 2014, the average euro exchange rate increased by 20%, while the premium transferred abroad — by 22%. At the same time, the share of outward reinsurance increased significantly, especially in corporate property insurance - from 44 to 50%. However, the continued growth of the rate in 2015 and partly in 2016 did not affect the growth of outward reinsurance.

The volume of international inward business in 2015 decreased, and taking into account the exchange rate dynamics, the market volume in the foreign currency decreased even further.

In the inward reinsurance market, the concentration process continues. In 2016, 39% of premiums fell on 2 companies - Sogaz and Ingosstrakh, whereas in 2012 this figure was 19%. Top-10 largest inward reinsurance companies held up to 77% of the market in 2016, while in 2012 their share did not exceed 47%.

In the segment of international inward reinsurance, the concentration is even greater. Only 4 companies (Sogaz, Ingosstrakh, ACE and AIG) have a premium volume of over 1 billion rubles, accounting for 57% of the market, while the top 20 companies account for 97% of premiums in the inward international reinsurance market from abroad.

Download here the full report
.

Related articles

photodune-3834701-laughing-girl-xs

Online insurance in Europe reached more than 100 billion EUR in 2016

Online and direct channels are the fastest growing business models in both life and non-life insurance industry in Europe. The market share of the online/direct channel business was, in 2015, 8.2% of the total business, while the total gross written premiums of this channel throughout all Europe reached 99.3 billion EUR.

2017-11-16
photodune-3834701-laughing-girl-xs

S&P Global: Polish motor insurers face a decade of uncertainty due to retrospective bereavement damages claims

Over 12 months, average prices for Poland's mandatory motor third-party liability (MTPL) insurance have shot up by about 47%. S&P Global Ratings attributes part of this spike in policy prices to the rising cost of bodily injury compensation claims in Poland over recent yearsPolish motor insurers have also seen fierce competition and inflation in spare parts claims, reads a study recently published by S&P Global. Courtesy to S&P's, XPRIMM readers are exclusively offered access to the study's findings.

2017-11-02
photodune-3834701-laughing-girl-xs

New insurance solutions to cover evolving exposures that businesses face

The global commercial insurance market was worth about USD 720 billion in premiums in 2016. The 10 largest markets mirror the world's biggest economies, and account for 73% of global commercial premiums. They include the leading industrialised countries of the G7 group, China, Australia and South Korea. The latest sigma study "Commercial insurance: innovation to expand the scope of insurability" is about the innovative risk transfer solutions available to cover the ever-evolving range of exposures that companies face.

2017-10-12
photodune-3834701-laughing-girl-xs

Bridging the protection gap in Eastern Europe

For some families living in the former industrial regions of Eastern European countries, the social welfare payments offered by the Government are the most expected moment, each and every month. They are most helpful as a survival tool but, at the same time, combined with insufficient or even sometimes inexistent state-driven programs for tackling these issues, are considered by experts as a factor against actual change in both mentalities and lives.

2017-09-21
photodune-3834701-laughing-girl-xs

What is happening with the Romanian private pensions' Second Pillar?

The future of the mandatory Second Pillar pensions is among the most disputed subjects, in the last period. After the rumors saying they'll be nationalized, the last discussions show that the participants' contribution will be reduced possibly to 1% from the current 5.1%, which will have a significant impact over the future pensions.

2017-08-31

ON THE MOVE

Swiss Re appoints new CFO and proposes new members to the BoD

Swiss Re announced that John DACEY, currently Group Chief Strategy Officer, is appointed Group Chief Financial Officer, effective 1 April 2018. He succeeds to David COLE, who will step down to pursue a non-executive career, while remaining a board member of several Swiss Re subsidiaries.

Piotr OZAREK is the PZU's first Ombudsman

Piotr OZAREK was appointed to perform the newly established function within PZU, as the first client's spokesperson of the insurer. His main task will be of helping in the most difficult and complicated cases in which PZU's clients are not satisfied with the solution.

Desmond BOHAN joins JLT Re as Senior Vice President

JLT Re, part of the global provider of reinsurance broking and consultancy, has appointed Desmond BOHAN as Senior Vice President in Stamford, Connecticut. He will focus on the continued expansion and development of JLT Re's Program practice in North America.

TOP EVENT

"Insurance and Pensions reloaded" - the 7th EIOPA Annual Conference

The 7th EIOPA Annual Conference takes place today in Frankfurt am Main, Germany. A review of the current supervisory covergence issues and of the prospects of the Pan European Personal Pension Product are on the event's agenda, together with analyzing the ways in which regulation may enable innovation.

22.11.2017

photodune-3834701-laughing-girl-xs

"IIF2017 - Insurance in the DIGITAL World" Conference took place in Vienna

"IIF2017 - Insurance in the DIGITAL World" conference brought together in Vienna well-known insurance professionals from all over the world who analyzed the latest digital trends in the industry, taking into account the fast digitalization of the financial services providers' world, in particular in the insurance field, which is creating both huge opportunities and strong challenges for the players.

14.11.2017

photodune-3834701-laughing-girl-xs

Croatian Insurance Days Live

On 9 November has started in Opatija, Croatia, the 2017 edition of the Croatian Insurance Days Conference, the traditional meeting of the Croatian insurance top professionals with their European peers. XPRIMM Publications are supporting the event as Media Partners.

09.11.2017

photodune-3834701-laughing-girl-xs

The 2017 Baden Baden Meeting: Short recap

The Baden-Baden meeting, one of the key events in the reinsurance calendar, has just set the final point of this year's edition. XPRIMM Publications have reported from the meeting's premises. Let's recap!

26.10.2017

Baden Baden Headlines 3: CEE insurance markets are attractive for reinsurers

Central and Eastern Europe insurance markets are an important source of business for Lloyds, total premium income from this region increasing by EUR 64 million since 2010, pointed out the Lloyd's representative in a seminar dedicated to CEE insurance markets: "We are seeing strong growth from Czech Rep, Poland, Slovakia and Ukraine. At the same time are some contractions from Russia, Bulgaria, Romania and Hungary due to challenging trading conditions as political implications and other sanctions".

25.10.2017

Baden Baden Headlines 2: cyber insurance market set to grow under regulatory presure; nat cat events more frequent, but losses per event are decreasing

Asian insurance market, especially the Indian market - are considered to be "the new El-Dorado" of the global re/insurance market, with rapidly expanding markets and an dynamic environment: "Indian P&C re/insurance markets are expected to grow at a pace of 15% per annum", according  to Victor PEIGNET, CEO, Global P&C, SCOR SE. The French -based reinsurer setted-up its Indian branch in 2016, after the authorisation from the local market authority - IRDAI. India's re/insurance market has become more attractive for global companies following the relaxation of regulatory requirements, and lately, "big names" in the industry entered the market by opening branches: GEN Re, SCOR, Lloyd's of London, MUNICH Re, SWISS Re, Reinsurance Group of America (RGA), HANNOVER Re, XL Catlin and others.

24.10.2017

See all