LIVE: 1st National Reinsurers Summit in Moscow: focus on global cooperation

20 September 2018 — Daniela GHETU
Today has started in Moscow the 1st National Reinsurers Summit "National Reinsurers: Focus on global cooperation". Organized by the Russian National Reinsurance Company (RNRC) with the support of the Central Bank of the Russian Federation, the conference has the insurance portal as Media Partner.

"In a rapidly changing world a traditional market as reinsurance shows trends to change and shift in the centers of influence. Many countries all over the world create national reinsurance companies with the participation of state capital in order to support their domestic insurance markets. Today a growing role of national reinsurers is one of the visible industry trends. It's time to join efforts, set up a potential and new opportunities for growth," Nikolai GALUSHIN, CEO of RNRC stated in his opening speech, emphasizing that this was the main reason for RNRC to organize the first ever professional summit of the national reinsurance companies.

Follow us to see the main statements during the Moscow summit:

Sergei SHVETSOV, First Deputy Chairman, Central Bank of the Russian Federation
  • The Central Bank of Russia intends to reduce its participation and shares in the insurance companies and also in the banks, in the medium term, but for the moment the situation will not change because of the international sanctions hindering the participation of foreign investors in this market
  • In 2014 because of the sanctions we decided to build our own capacity - that's how RNRC was created - we have invested 20 million dollars and offered additional capital to support it
  • The reinsurance portfolio of RNRC is composed of two lines: the mandatory one (it should accept sanctioned risks) and the voluntary one (all the players in the direct insurance market must offer 10% share from each reinsurance risk to RNRC)
  • For the future we are ready to organize an IPO at RNRC and to share the participation in equity with other market participants; we'll keep a stake, but are ready to reduce our participation
Igor YURGHENS, President, All-Russian Insurance Association
  • Despite the economic situation the Russian insurance market saw a positive trend in the first semester of this year, with premiums increasing up to 731 billion roubles, and we estimate an increase of 13-14% till the end of this year
  • Life insurance is the market driver in Russia, in 2017 it increased by 53%, due to investment component of the life insurance policies;
  • The property insurance business has decreased because of the sanctions;
  • Our problem is MTPL, because of the important claims volume and low tariffs (they are established by the Central Bank) - we believe that this market should be liberalized
  • The consolidation of the market continues - at the end of September this year there were 208 insurance companies on the market, in comparison to 404 companies in 2014;
  • By 2021 we have to open our market for foreign investors - which will have the same conditions as Russian players in opening branches etc. - this could boost the market 4 times
  • If the sanctions will continue the market will further consolidate internally ..I consider that going East and South is our solution
Deepak GODBOLE, General Manager, GIC Re (India)
  • The national markets should first of all protect their own market before speaking about globalization
  • GIC Re and China Re intend to extend their international presence, not to remain local players, because they have huge potential
  • The Indian insurance market is expected to grow to 80 billion dollars written premiums by 2022
Nikolay GALUSHIN, President, RNRC
  • RNRC would have not been created if there weren't sanctions introduced for the local market, it was a necessity to build additional capacity for the market
  • Prior to RNRC's creation 85% of reinsurance premiums were ceded abroad, now this volume decreased to 76%
  • Total insurance premiums of the Russian market are less than 20 billion dollars annually, main driver is life insurance, with a rate of growth exceeding 40% annually
  • We have as a main goal to offer some added value services and extra capacity and also to generate new insurance products for domestic market
  • We want to be present also on the international market, but we have some restrictions, first of all because of the country's sovereign rating (BBB-)
  • According to our strategy till 2021, we should achieve in the next 5 years premiums of almost 500 million dollars
  • By 2021 we intend to have a 20% share in the portfolio coming from international markets
  • Because of the sanctions, the pressure on our capital is growing, because there is more sanctioned business coming to us, but we have also the option of Central Bank's additional guarantees
  • There is also a challenge related to the WTO membership, thus, by 2021 the Russian insurance market will be opened for branches of international insurers
  • Another challenge will be the forthcoming introduction of the household insurance scheme in Russia; under this scheme we'll be obliged to reinsure 95% of the risks; the challenge here is in the low diversification because we could find ourselves in the situation of having in portfolio only risky policies; this is a challenge and we should work on solution by the time when this law will come in force

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