RUSSIA: in 2H2018 agroinsurance with state support increased by 79% y-o-y and non-state insurance policies went up by 33%

In 2H2018 agroinsurance with state support increased by 79% y-o-y, as the President of the National Association of Agriculture Insurers (NAAI) Korney BIJDOV informed.

According to him "2018 results show that negative processes in agroinsurance has stopped. After 1.5 years of the segment's decline we observed a recovery growth, which almost totally fell in the second half of 2018. GWP of agroinsurance in 2H2018 went up by 56% y-o-y, at that agroinsurance with state support increased by 79% and policies without state support - by 33%. As a result, total volume of agroinsurance in 2018 exceeded the NAAI forecast and reached RUB 3.7 billion", BIJDOV explained referring to the data, published by the Central Bank.

Of RUB 3.7 billion 53% were generated by agroinsurance with state support. RUB 982 million were collected in crop insurance and RUB 969 million - by livestock insurance, while a year ago subsidized crop insurance generated RUB 1.43 billion and subsidized livestock insurance - RUB 948 million. According to BIJDOV such dynamics was due to the industry seasonal fluctuation - "if livestock producers could buy insurance in 2H2018 after restoration of subsidies, crops could no longer be insured and thus the yearly figures remained negative, although GWP of crop insurance increased by 80% in 2H2018", he explained.

Agroinsurance without state support in 2018 went up by 16% to RUB 1.78 billion. Growth of this segment was also unstable - in 1H2018 it amounted to only 3%, while in 2H2018 it jumped to 33%. NAAI believes that the increased demand for additional insurance protection was linked to the revival of the insurance with state support.

Total number of agroinsurance contracts in 2018 dropped by 11% and paid claims decreased by 2% to RUB 1.56 billion.

"In 2019 NAAI expects the agroinsurance market to come back to a growing trend. Besides the consistent position of the Ministry of Agriculture, the growth will be supported also by amendments to the law on state support of agroinsurance, which entered into force on March 1, 2019, and are to improve flexibility of agroinsurance conditions ", the President of NAAI said.

*EUR 1 = RUB 79.4605 (31.12.2018)

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