The GWP increase in this segment for insurers ranged from 1.4 times to 80 times, and three companies in the period began or resumed provision of agroinsurance with state support from scratch, as NAAI noted in the rating of insurers' activity, based on the data of NAAI and the Bank of Russia.
NAAI President Korney BIJDOV explained: "In the past two years, the subsidized agroinsurance market has been recovering thanks to two main factors: the legislative framework, updated since 2019, which allowed farmers to have a flexible choice of insurance conditions, and targeted measures by the Ministry of Agriculture of the Russian Federation and the Bank of Russia aimed at development of state support in agroinsurance, undertaken since the end of 2018.
During this period, the volume of subsidized agroinsurance has more than tripled - from RUB 2 billion in 2018 to RUB 6.7 billion in 2020 (~EUR 73.88 million*). In 2020, state-supported agroinsurance became the fastest growing segment in the Russian insurance market in general, showing an increase of 54% y-o-y. The agricultural sector itself also continues to demonstrate development - in 2020, growth of agricultural production in Russia amounted to 5.3%, so the growing interest of insurance companies in insurance of agricultural risks is obvious. It can be said that during two years all NAAI insurers have shown increased activity in this direction," he stressed.
The NAAI rating is based on two indicators - GWP volume of companies under contracts with state support for 2020 and its dynamics compared to 2018. Thus, the leader in terms of premiums in 2020, as in the previous two years, is RSHB-Insurance, with GWP in 2020 in the segment of RUB 2.5 billion and its share on the agroinsurance market with state support at 40%. It is followed by ROSGOSSTRAKH (RUB 1.4 billion), which jumped from the 9th position in 2018 to the 2nd in 2020. The third leader is AlfaStrakhovanie (RUB 787 million).
According to the second indicator (growth dynamics over two years), the leader is ROSGOSSTRAKH, the portfolio of which in 2020 exceeded the indicator of 2018 many times (RUB 1.4 billion in 2020 vs RUB 18 million in 2018).
When making the rating of the insurers' activity in agroinsurance with state support, NAAI considered the weight of their portfolios and dynamics of their growth. The seven most active companies in this market included ROSGOSSTRAKH, RSHB-Insurance, SOGLASIE, AlfaStrakhovanie, VSK, Avangard-Garant and Absolut-Insurance. These participants collected 91% of subsidized agroinsurance premiums.
"The GWP volume and dynamics of a company are important, but they are not the only indicators taken into account by farmers when choosing an insurer. The key factor for agricultural producers when choosing an insurer is its presence on the territory of a particular region, availability of experienced specialists who know the specifics of agricultural business, as well as efficiency in insurance compensation payments. All agricultural insurers - NAAI members provide insurance services with state support according to the unified rules and standards of the agricultural insurance system", the president of NAAI emphasized.
*1 EUR = 90.6824 RUB (December 31st, 2020)