RUSSIA: in 2020 agroinsurance increased by 43% y-o-y

16 March 2021 —
Among all segments of property insurance in Russia in 2020, agroinsurance was one of the fastest growing - its volume increased by 43% to RUB 8.1 billion (~EUR 89.32 million*), the National Association of Agriculture Insurers (NAAI) reported.

President of NAAI Korney BIJDOV explained that "insurance with state support remains the main driver of agroinsurance growth, as in previous years. GWP generated under subsidized contracts in 2020 increased by 54% to RUB 6.7 billion from RUB 4.4 billion a year earlier. At the same time, the data of the Bank of Russia confirmed a significant increase in the GWP of insurance with state support in all industry LoBs. Under crop insurance contracts GWP increased by 64% to RUB 5.0 billion from RUB 3.0 billion in 2019, in livestock insurance - by 27%, to RUB 1.7 billion from RUB 1.3 billion a year earlier. Also, in 2020, for the first time, fish farming insurance contracts were concluded with state support, and GWP in this segment reached RUB 60 million", he said. Total amount of subsidies in 2020 increased by 30% to RUB 2.3 billion.

On the other hand, GWP of agroinsurance without state support also increased - to RUB 1.34 billion. "Although the GWP increase under unsubsidized contracts is only 5%, positive dynamics in this area is significant," said Korney BIJDOV.

Paid claims in agroinsurance in 2020 increased by 53%, exceeding RUB 3.0 billion, of which RUB 2.3 billion (76%) were paid under agroinsurance contracts with state support. NAAI notes that paid claims in this segment grew more than 4 times y-o-y.

"In 2021, NAAI expects a further growth of the agrioinsurance market thanks to an almost twofold increase in subsidies and positive experience of farmers in a number of regions which received insurance payments. Development dynamics will also significantly depend on the adoption of the bill on introduction of insurance for farmers in case of loss of crops because of emergencies", BIJDOV added.

At a meeting of the Government of the Russian Federation on March 11, Chairman of the Government of the Russian Federation Mikhail MISHUSTIN noted the positive results of agroinsurance in 2020 and emphasized the need of more active development of this area. The Minister of Agriculture of the Russian Federation Dmitry PATRUSHEV said that in 2020 RUB 2.2 billion were allocated for agroinsurance with state support, and in 2021 - twice as higher - RUB 4.4 billion. It is assumed that in 2021 this will allow insuring 28% more crops than a year earlier. It is also worth noting that 5.6 million hectares of crops were insured in 2020, which is 5 times higher than in 2018.

* at the following exchange rate:

1 EUR = 90.6824 RUB (December 31st, 2020)