STATISTICS: RUSSIA, 1H2023: almost 30% y-o-y decrease in european currency because of strong depreciation of the ruble

13 September 2023 — Marina MAGNAVAL
STATISTICS: RUSSIA, 1H2023: almost 30% y-o-y decrease in european currency because of strong depreciation of the ruble

The insurance market ended the first half of 2023 with RUB 1,073.12 billion (EUR 11.28 billion), which is 24% more y-o-y in rubles. However, in euros, it decreased by 29% due to a sharp change in exchange rate compared to the first half of 2022. Paid claims reached RUB 494.68 billion rubles (+17%)/EUR 5.20 billion, as follows from data published by the Central Bank.

In its market review the Central Bank notes that GWP in 2Q2023 was over a quarter higher compared to 2Q2022, reaching RUB 555.4 billion. This relates to the low base of the second quarter of 2022 and is the result of a general recovery in economic activity (increasing demand in the segments of credit life insurance, investment and accumulative life insurance), as well as an increase in prices for cars and spare parts, which directly affects the cost of Motor Hull.

The number of concluded contracts increased by 16% y-o-y. Growth was recorded in almost all key types of insurance. The maximum increase was in accident insurance and illnesses (+5.7 million units) and MTPL (+0.7 million units).

Paid claims in 2Q2023 grew slower than premiums. First, this is because, unlike premiums, the dynamics of paid claims is not affected by the low base. As a result of faster growth of earned premiums relative to losses incurred, the loss ratio decreased to 49.8%. The reduction in business costs and loss ratio led to a decrease in the combined loss ratio to 90.3%. This indicates profitability of the insurance activities of insurers.

At the end of 1H2023, the profits of Russian insurers increased almost seven times y-o-y, to RUB 306.9 billion. This was facilitated by an increase in results from investment activities - due to transactions with foreign currency and financial instruments (in 1H2022, insurers received a loss on such transactions). Profits from insurance activities decreased due to a drop in financial results from life insurance. The result from non-life insurance increased against the backdrop of an increase in earned premiums.

Thanks to the increase in profits, the profitability of insurance companies has improved. Return on equity amounted to 40.4% and return on assets – to 10.1% - these are the maximum values since 2015. In 2Q2023, total capital of insurers reached RUB 1.3 trillion. The amount of insurance reserves rose to RUB 3.1 trillion (+2.1%), mainly supported by life insurance reserves. The value of insurers' assets at the end of June 2023 exceeded RUB 4.9 trillion.

The number of insurance companies in the second quarter decreased by 1, totaling 135 by the end of June 2023. At the same time, concentration of the Russian insurance market has remained virtually unchanged. The share of the top 20 in terms of premiums was 88.7%. SOGAZ remains the leader in the overall ranking with RUB 173.67 billion, followed by SBERBANK Life Insurance (RUB 130.05 billion), and with a small gap from each other, the third and fourth places are occupied by AlfaStrakhovanie and INGOSSTRAKH respectively.

Access and download the Russian insurance market statistics for 1H2023 in euros and rubles.