LIVE: Moscow, Russia: The XXII International Reinsurance Conference

11 April 2018 — Oleg DORONCEANU
The XXII International Reinsurance Conference has started today in Moscow, organized by Delovoy Format, with the support of the Russian Insurers Association. XPRIMM, the traditional Media Partner of the conference, has launched on the occasion the latest edition of its Insurance Profile Russia, providing for 2017 insurance statistical data.

The event started today will also continue tomorrow, with plenary sessions, open discussions and workshops. Among the main topics of the conference there are:
  • the state of the insurance and reinsurance market
  • the conceptual development of incoming reinsurance from international markets
  • the impact of the world reinsurance sector on the Russian companies' activities
See below the main statements of the first day:

Igor ALEKSEEV, Deputy Director, INGOSSTRAKH' Reinsurance Department
  • Attending the event are 230 leaders and re/insurance professionals from 122 companies, of which 39 foreign companies from 20 countries
Svetlana NIKITINA, Deputy Director of the Insurance Market Department, Bank of Russia.
  • In 2017, we see a stabilization of the Russian reinsurance market, supported among other by the emergence of the State Reinsurance Company - RNRC, which brings added market stability. The United Kingdom, Germany, Switzerland, France and the United States were the main partners / countries where the largest proportion of Russian reinsurance premiums were ceded in 2017, and the supervisory authority believes it is a good dispersion
Aleksey BREDIKHIN, Director, Financial Institution Rating Group Analytical Credit Rating Agency (ACRA)
  • Insurance penetration in the GDP is five times lower in Russia than in the European countries and some 1.5 times lower than in the CEE countries; we expect this indicator to reach 1.9% in the next five years.
  • Life insurance is still lagging behind the non-life sector but has a tenfold higher development potential; in fact, most of the market growth in the future years is expected from the life insurance sector. Therefore, we expect that within 5 years the shares held in the market portfolio by life and non-life insurance will be more or less the same
  • We expect for 2018 a 26% y-o-y growth rate for the life insurance segment, while the MTPL line will see a 3% decrease in GWP; a strengthening for the Motor Hull business line is also to be expected, supported by the increasing cars sales
  • The growth driver in life insurance will remain the Investment Life Insurance products which became very popular
Nikolay GALUSHIN, President, RNRC
  • The international business' volume remained stable in 2017
  • The share of the premiums ceded in reinsurance by the Russian direct insurers in the total written direct premiums has seen a decreasing trend, while the own retentions share went up; yet, premiums ceded for facultative reinsurance are increasing
  • The big Russian companies continued to control the market, a trend that will continue also in 2018
  • Russian insurers are still placing their risks in reinsurance mainly abroad - in the UK and Continental Europe, but the overall volume of premiums ceded to foreign reinsurers is decreasing
  • Except for SIGAZ, most Russian insurers have ceded lower premium volumes to foreign reinsurers; yet, it is worth mentioning that the best Russian risks are still placed abroad
  • New sanctions imposed on Russia will lead to a change of the reinsurance landscape towards increasing the local players' own retention
  • With the emergence of the RNRC, the volume of the domestic reinsurance market will increase; we expect that a share of the premiums previously ceded on the international markets will be reoriented to the local market, while RNRC's share in the total business will increase
Vladimir CHISTIUHIN, Deputy President, Central Bank of Russia
  • 14% of the total GWP was reinsured in 2017, a decreasing percentage in comparison with 2016; in absolute terms, premiums reinsured amounted to RUB 35 billion, which is also less than one year before
  • There are less fraudulent schemes in the reinsurance activity, among others due to the Central Bank's efforts; numerous interpellations were made to foreign authorities that helped the Bank in undertaking some correction measures; also, the agreement signed with IAIS (the International Association of Insurance Supervisors) for information exchange is very important and helpful
  • Transparency has increased in the market after introducing the 10% cession to the RNRC; also, a larger capacity is available for NatCat risks, while the market standards are improving
  • In Top 10 domicile countries of the reinsurance providers, Western Europe and the USA have a leading role, but their share in total business is decreasing as a larger volume is directed towards reinsurers from China, Asia or Middle East
  • There is nothing wrong in reinsuring the Russian risks abroad; what is important is the quality of the reinsurers, their capacity of absorbing the risks placed by the Russian insurers; cooperation with the large global reinsurers is positive
  • RNRC was created for reinsuring the atypical risks, which are not undertaken abroad and remain in the RNRC's balance sheets; the company is also providing additional capacity, which will favor the local reinsurance market's growth
  • International brokers are important, first of all because of their solid brand and connections; these are the brokers we intend to work with and nobody denies their utility for the market
  • For our reinsurance operations, we need to choose as partners those countries which are not joining the sanction regime against Russia, i.e. countries which will not prevent claims payments for Russian clients; therefore, currently there is a strong potential to develop our reinsurance business with China, India or the other BRICS.
Fuad KHULIYEV, President of the Board, Az Re
  • CIS countries, Eastern Europe, Turkey, Iran and African countries are the territories where we doing the best reinsurance business. We have a good reputation and very good results in the local market; in 2017 we have written about USD 17 million in premiums, while our profit was of USD 12 million
We are lately part in the big reinsurers' contracts, which is very important for us

Andrey UNTON, General Director, BELARUS RE
  • The Russian market is of great importance for us
  • Because of our rating, we are part of contracts in which the big groups are not involved
  • Our business covers many territories where rating requirements are no9t so high, including the Arab and African countries or India
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