RUSSIA: Expert RA: by the end of 2020, the market will drop by 4-5% y-o-y

16 October 2020 — Marina MAGNAVAL
The insurance market will continue to be under pressure of the economic downturn caused by COVID-19, and the market volume by the end of 2020 will reach approximately RUB 1.42 trillion (~EUR 15.65 billion*), having lost 4-5% of GWP, according to the study of the Russian leading rating agency Expert RA.

Market dynamics will be negatively affected by reduction in incomes of the population and businesses, as well as subsequent decline in credit, investment, purchasing and entrepreneurial activity. The coronavirus pandemic will continue to be a significant factor of uncertainty and the main reason for deviations from the forecast.

In 1H2020, the insurance market remained at the level of 1H2019. At the same time, non-life sector added only 0.8%, while the life one contracted by 2.5%. The agency noted that in 1Q2020, both sectors saw positive dynamics, but in 2Q2020 the dynamics changed to negative.

According to the forecast of Expert RA, the non-life sector at the end of 2020 will decrease by 5-6% y-o-y, while the decrease in life insurance will be insignificant - by 1-2%. A decrease of the average premium in Motor Hull and refusal of some consumers from insurance will lead to 15% reduction in the segment. One of the market drivers, voluntary health insurance will drop by 10% due to lower customer costs, transition to cheaper programs or refusal to purchase coverage. Insurance of other property of legal entities will also lose 10%. At the same time, MTPL will keep GWP at the level of 2019, since it is least susceptible to negative trends due to its compulsory nature. Life insurance will decline slightly, supported by low bank rates and recovery in the consumer and mortgage lending markets, the agency said.


* for the following exchange rate:
EUR 1 = RUB 90.7065 (as of 14.10.2020)



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