Inward reinsurance - growth by 14.4%
For the first time in a year, the premium volume for the quarter was 4% lower than a year earlier. As a result, the annual premium growth dropped below 20%.
The growth rate of the market without RNRC outstripped the growth rate of RNRC. Excluding RNRC, the market growth for 2020 amounted to 16.5%, mainly due to foreign business, where the share of RNRC is decreasing. The international market share reached 41.9%.
Source: RNRC
In the structure of the inward reinsurance market, property is still in the lead (53.1% vs 52.1% in 2019). Premiums for property insurance of individuals more than doubled, but in absolute terms this has almost no effect on the overall market performance. The property of legal entities in 4Q2020 suspended its growth, however, its share increased slightly. In absolute terms, this segment increased by RUB 4.8 billion. As in all LoBs, growth rate of liability insurance decreased in 4Q2020, but premiums on liability insurance (excluding compulsory insurance of liability of owners of dangerous facility and liability of carriers) still increased by more than a third. A noticeable share of the absolute increase fell on reinsurance of MTPL (RUB 0.8 billion), however, growth was observed in almost all types of insurance indicated in reporting, except for voluntary insurance of liability of vehicle owners.
An earlier forecast about a possible reduction in the gap between the leading countries, from where premiums come to Russia, was never realized in 2020. Premiums from France increased by 25%, while the Chinese share showed an increase of only 7%. As a result, the leaders changed places. The UK returned to the TOP-10, after leaving it in 2019 due to the transfer of Chubb's business to France. At the end of the year, Turkey and Barbados appeared in the TOP-20.
The market concentration at the end of 2020 remained at the level of 2019 (TOP-10 account for 87%). The share of the TOP-3 (58%) gradually declined throughout the year as the activity of other players grew.
The dynamics of inward reinsurance paid claims after an unsuccessful 2019 year for the domestic market, in 2020 developed better than usual, Natalia KARPOVA, President-Chairman of the Board of RNRC said at the 25th Reinsurance Conference.
Source: RNRC
After an unsuccessful 2019, the Russian market segment set a record. It is possible to talk about successful 2020 for reinsurance, without any major losses. Unlike 2019, in 2020 there were no companies with negative results among the leaders. All companies from the TOP-10 have crossed the billion (in RUB) mark.
Outward reinsurance premiums for the year increased by 17%
At the end of 2020, the outward reinsurance premium volume grew by 17% due to a sharp rise in the first and third quarters. A noticeable part of the growth is associated with reinsurance of a large (~ RUB 10 billion) multi-year project of SOGAZ, and also partly with the accelerated fall in the ruble exchange rate in the second half of 2020. After the extreme growth in 1Q2020, the domestic market was lagging behind the international one (12% vs 19% respectively), which led to a drop in the domestic market share for the first time in several years, RNRC noted.
Source: RNRC
In the structure of the outward reinsurance market during 2020, the shares of individual segments significantly deviated from the indicators of 2019, however, by the end of 2020, the situation leveled off. Property reinsurance further increased its share in the total amount of the ceded premiums. The property insurance of legal entities strengthened its leadership (49.4% in 2020 vs 45.8% in 2019). At the same time, the volume of insurance of business risks changed slightly. The highest share growth was recorded by the largest market segment - property insurance of legal entities. Without this segment, the share of the ceded property premiums would be about 46%. The share of the ceded premiums in liability insurance increased significantly, mainly supported by aviation liability reinsurance, where ceded premiums reached almost 80%. However, in other types of liability (except for compulsory insurance of hazardous facilities and insurance of default on obligations), the share of reinsurance also increased. The sharp decline in liability reinsurance for default on obligations is due to the disappearance of insurance for developers. Liability insurance saw the most active dynamics among the main types of insurance - growth reached 34%, which increased the share of this segment by 1.5%. This growth was mainly due to three segments - aviation liability, third party liability and MTPL, first operations for which started last year. The most impressive dynamics was observed in insurance of agricultural risks - by 63%.
At the end of the year, the situation with premiums distribution between countries returned to a more normal one. The leaders among the countries where premiums are ceded are Great Britain, Germany, Switzerland, France, and the USA. RNRC emphasized that the SOGAZ's project had its impact - the share of Great Britain, where LLOYD`s syndicates are located, improved. The share of Germany noticeably decreased which is largely due to a sharp decline in Motor Hull reinsurance by SOGLASIE. Italy returned to TOP-20; Hong Kong and Singapore showed tenfold growth.
SOGAZ, a long-term leader in the outward reinsurance market, demonstrated a significant increase in the ceded portfolio in 2020. However, INGOSSTRAKH showed an even more impressive premium growth rate - by 40% y-o-y (second place). In general, besides the TOP-2, the market dynamics were less active - from the TOP-10, only ROSGOSSTRAKH grew faster than the leaders (by 71%), VSK also had a noticeable increase (+35%). A two-fold growth was recorded by SBERBANK INSURANCE and HAYDE, which entered the TOP-20. Reinsurance volumes of SOGLASIE decreased the most.
Speaking about the dynamics of paid claims in outward reinsurance, RNRC stressed that in the absence of large losses, 2020 turned out to be surprisingly favorable year for reinsurers - record low payout ratio which had not been observed for a long time.
Source: RNRC
This turned out to be especially favorable for the Russian reinsurers, strongly affected by the 2019 paid claims.
*1 EUR = 90.6824 RUB (December 31st, 2020)
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