STATISTICS: RUSSIA, 1Q2020: Market growth exceeded 12% after previous quarter stagnation

9 July 2020 — Marina MAGNAVAL
In 1Q2020, the Russian insurance market growth was the highest over the past five quarters, after stagnation at the end of 2019, the Central Bank of Russia reports. The market GWP increased 12.6% year-on-year, its total volume reaching RUB 426.3 billion (~EUR 5.0 billion*), according to the data published by the regulator.

Growth was observed in all key market segments. Life insurance recovered its growth thanks to the development of accumulative insurance programs and the increasing interest of the population due to a decrease in average market rates for bank deposits. At the same time, growth of the market leading segments in 2019, credit insurance and voluntary health insurance, slowed down. The increase in number of MTPL and Motor Hull insurance contracts was supported by growing car sales underpinned by willingness of the population to buy before the price increase. Experts note a significant increase in insurance contracts for other property of legal entities, which can be explained by seasonal renewal of large contracts.

Market paid claims also increased - by 14.6% y-o-y, to RUB 159.5 billion. Experts attribute the increase of paid claims to a significant up-trend of investment life insurance paid claims. At the same time, reduction of paid claims was observed in segments such as other property of legal entities.

The share of insurers' expenses for doing business has reached its maximum value over the past six quarters (40%), as the regulator emphasized. The increase in expenses led to an increase of the combined loss ratio to almost 90%. However, the ratio below 100% still indicates profitability of insurers. Return on equity remained at a high level (33.2%), while insurers' profit increased by 19.2%, to RUB 71.6 billion, despite the increased loss ratio. Insurers' capital at the end of March 2020 amounted to RUB 835.8 billion, and total assets exceeded RUB 3.5 trillion.

SOGAZ maintained the leading position with a market share of over 28% - the leader's GWP exceeded RUB 120 billion (~EUR 1.4 billion). SBERBANK Life insurance ranked second, despite the insurer's GWP dropping by more than 27% y-o-y, while AlfaStrakhovanie kept the third place, which the company occupied at the end of 2019 as well.


* for the following exchange rate:
1 EUR = 85.7389 RUB (March 31st, 2020)


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