RUSSIA, 1Q2017: Premiums accepted by local reinsurers decreased by 15.65%; RNRC accounts for 4% of the outgoing reinsurance premium

In 1Q2017, the volume of premiums accepted in reinsurance by the Russian companies decreased by 15.65% and totaled RUB 9,747.14 million, of which RUB 5,930.92 million accepted premiums inward of RF and 39.15% outward of the RF.

The market's conditions made small-middle specialized players to leave the market, including names like UNITY Re, TRANSSIB Re, JASO, TRANSNEFTI, etc. Thus, due to the "disappearance" of Russian specialized reinsurers the volume of incoming reinsurance business attracted from abroad decreased by 32.82% to RUB 3,816.21 million.

A RNRC (Russian National Reinsurance Company) report noted that the decline in premiums on the local market is caused also by "the decrease in the activity of a number of Russian players, such as ROSGOSSTRAKH, KAPITAL Insurance, VTB Insurance, SCOR". Thus, the inward incoming reinsurance market, which amounts to about 60.84% of the total gross premium accepted in reinsurance practically remained at the level of 1Q2016 and totaled RUB 5,930.92 million.

"On the international line, almost all major players (except: SOGAZ) have lowered their indicators, which is not surprising - reinsurance agreements are denominated in foreign currencies, as well as the ruble figures depend on exchange rates. The average rate of the currency basket from 1Q2016 to 1Q2017 has changed by almost 30%, which affected the performance of the premium. The impact on the local market was relativelly low, although it is significant for international players (SCOR, CHABB, AIG)", stated RNRC's report. As a result, almost all countries-partners of the Russian incoming reinsurance business decreased their business.

In the reporting period, the total volume of GWP ceded in reinsurance dropped down by 20%, to RUB 29,435.52 million, due to the decline by 24.71% of the premiums transferred in reinsurance by Russian companies to the international market.

There are two trends on the market, reads the report:
  • Some large companies increased the capacity of their obligatory contracts, which also leads to a reduction of facultative outgoing reinsurance (for example: INGOSSTRAKH and SOGAZ);
  • There is tendency to conclude contracts on the basis of co-insurance, which also leads to an increase of obligatory capacities and a reduction in the placement of risks in facultative reinsurance, which generally reduces the volume of the outgoing premium.
RNRC's share in the outgoing reinsurance premium represented only 4%

The RNRC's share in the incoming reinsurance market amounted to 12%, while the company's share in the outgoing reinsurance premium was only 4%, which is much less than the obligatory cession of 10% established by the law.

"We expected that due to the entry into force of the law from January 1, 2017, part of the liabilities under reinsurance contracts beginning on January 1, 2017, will be placed in reinsurance at the end of 2016. But we did not expect the difference to be so significant (...)", mentioned Nikolai GALUSHIN, President, RNRC.

At the beginning of 2017, Igor ZHUK, Director of the Department for the insurance market of the Central Bank of the Russian Federation stated that according to the results of 1Q2017, the Central Bank of Russia will check the risks that insurers transferred to the RNRC as a cession. According to official, about a third of the reinsurance market were representing different reinsurance scheme.

The full report here.





Related articles

RNRC: GWP increase of 27% in Q3 as compared with Q2/2017

The GWP by the Russian National Reinsurance Company (RNRC) increased to RUB 5.3 billion in the first nine months of 2017. In Q3/2017 written premiums increased by 27% to RUB 2.2 billion, compared to Q2/2017, the company's report reads.

2017-11-16

Russia: The new Board of Directors of ROSGOSSTRAKH to include well-known specialists in the market

The Board of Directors of ROSGOSSTRAKH may include the President of the National State Reinsurance Company, Nikolai GALUSHIN; the President-Chairman of the Board of one of the largest retail bank VTB 24, Mikhail ZADORNOV and Maxim CHERNIN, Chairman of the All-Russian Insurance Association for the Development of Life and Accident Insurance, according to korins.ru, based on the official sources of the insurance company.

2017-11-09

ON THE MOVE

TOP EVENT

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

BB Headlines: Rates are settled to increase following Q3 events

The main effect after the Q3 nat cat bill of over USD 100 billion: Global reinsures said - the "discounts and reductions in tariffs era" especially in European reinsurance market for the January 2018 renewals, will come to end. At the same time, some reinsurers might disappear and there are likely to be more mergers, acquisitions and run-offs processes.

23.10.2017

photodune-3834701-laughing-girl-xs

Baden-Baden Reinsurance Symposium: the industry-wide impact of disruption

"In our business we are more than used to disruptions [...] But the pace of disruption has been amplified by new sources of data and by the increase in the power to collate this data", James NASH, the President, International of GUY Carpenter stated during his opening address at the Reinsurance Symposium in Baden-Baden on 22 October.

23.10.2017

See all