Russian Property/Casualty Insurance Sector Carries High Risk Despite Expected Economic Growth, Says S&P Global Ratings' Report

S&P Global Ratings said that it assesses industry and country risk in the Russian property/casualty (P/C) insurance sector as high, reflecting that high country risk outweighs the intermediate industry risk.

In their view, high country risks in Russia (foreign currency rating: BB+/Positive/B, local currency: BBB-/Positive/A-3) create an unfavorable operating environment for insurers. Although they expect real GDP growth of 1.7% per year, on average, over 2017-2020, they see this level as low and not sufficient to significantly boost the development of the P/C insurance sector. Russian economic growth continues to be volatile, limited by the state's dominant role in the economy, low productivity, adverse demographics, sanctions, and the challenging investment climate.

Country risk improving to the extent that they assess it as moderate is unlikely in their view in the next one-to-two years, considering the high level of financial system risks, narrow and shallow financial markets, and weak payment culture and rule of law.

They assess industry risk for Russia's P/C insurance sector as intermediate.

Industry risk weakening such that they assess it as moderate is relatively unlikely, in their view, as the overall market is profitable. At the same time, they see that obligatory motor third-party liability insurance profitability remains challenging.

Follow XPRIMM Publications on LinkedIn, for more data on the insurance and financial industry.

Share |

Related articles


Lloyd's of London announced new members to the Council

Lloyd's of London announced that Albert BENCHIMOL and Victoria CARTER have been appointed respectively External member and Working member of the Lloyd's Council with effect from 1 February 2019. Michael WATSON, currently on the council, has been re-elected as External member.



Reducing the risks in agriculture by using insurance means, discussed in Skopje

On November 1st, an Agricultural insurance conference took place in Skopje, Macedonia, organized by the Insurance Supervision Agency in cooperation with the Ministry of Agriculture, Forestry and Water Economy. Drawing attention to the necessity of reducing the risks in agriculture by using insurance was the event's main purpose.


IIF 2018 - Insurance in a DIGITAL WORLD

Emmanuel DJENGUE, Innovation Director, Europe - RGAX, Spain is the Keynote Speaker at IIF 2018 - Insurance in a DIGITAL WORLD Conference in Bucharest, on November 27.


See all