STATISTICS: RUSSIA, 3Q2019: former market driver, life insurance, dropped by more than 11% y-o-y

9 January 2020 —
STATISTICS: RUSSIA, 3Q2019: former market driver, life insurance, dropped by more than 11% y-o-y
In 3Q2019, Russian insurance market GWP reached RUB 1100.0 billion (EUR 15.66 billion), thus remaining almost at the level of 3Q2018. The market in euro grew by 9.15% thanks to a more favorable rate, than a year ago. Paid claims reached RUB 433.5 billion (EUR 6.16 billion), as the data of the Central Bank, show.

Life insurance decreased by more than 11% y-o-y caused by the declining in investment life insurance. Non-life sector, on the contrary, showed positive change in local currency (+5.77%). According to the Central Bank, the market is still growing thanks to such classes as voluntary health insurance, credit insurance of borrowers and Motor Hull. The market dynamics is largely affected by the growing interest in individual insurance types, as the regulator noted.

Motor Hull, unlike MTPL, showed a slight increase at the end of the third quarter of 2019. GWP for the mentioned period amounted to RUB 121.45 billion (EUR 1.7 billion). At the same time, paid claims in the segment grew by 15% (to RUB 70.6 billion). Market experts noted a decrease in Motor Hull GWP under contracts with individuals, which was primarily due to dropping sales of new vehicles.

According to the national statistics, for the first 9 months of 2019, the total number of vehicles sold decreased by 4.5% y-o-y. In addition to that, the reduction of basic tariffs, the launch of new special promotions at reduced prices and strong competition on this market affected the dynamics as well. In terms of vehicle sales to legal entities, experts on the contrary noted an increase by 9% y-o-y, which partially offset the decline in individuals' side.

Of the 175 companies on the market, SOGAZ kept its leadership, while its market share has grown to 14.45%. SBERBANK Life insurance held its 2nd place (RUB 119.2 billion). INGOSSTRAKH moved up from the 6th to the 3rd place (almost RUB 78 billion). TOP-5 insurers also included AlfaStrakhovanie and VTB Insurance.

In the reporting period, the net profit on insurers increased by 10.2%, to RUB 150.4 billion. Insurance reserves by the end of September 2019 increased by 15.7% (over RUB 2 trillion), with about 52% of those accounting for life insurance.

Remuneration of intermediaries increased by 3.6 pp and amounted to 29.3% of all GWP received through intermediaries. About 50% of total remuneration to intermediaries was paid under credit insurance types (the share of banks in remuneration to intermediaries reached almost 85%).

According to experts, growth of remuneration to intermediaries affected the growth of expenses for conducting business and thereby the growth of the combined loss ratio of insurers (up to 86.9%). However, despite this, the profitability of insurers increased to 30.9% thanks to the growth in income of insurance companies from investment activities, as the regulator noted.

* 1 EUR = 70.3161 RUB (September 30th, 2019)

Access and download 3Q2019 Russian insurance market statistics (in EUR and RUB).