Winner is a company that grew, developed and was built under conditions
of crisis. Our success is not an accident, it was planned and carried
out. From that aspect, we have learned to develop our expectations
around the readiness of our team to respond to any circumstances and
adjust to any changes, and alleviate unexpected external conditions.
Naturally, we are closely monitoring all developments on the market, but
also in economic trends in general, and our consistent growth is the
indicator of our competence to anticipate the conditions and adjust
Describing the general situation in the Russian construction industry, it is also important to notice absence of any new system players - companies with or without international capital, which appears anyway a very obvious and expected outcome.
While Turkey's per capita income is above the world average, per capita
insurance spending is merely a quarter of the world average and
one-tenth of the European average. Insurance has yet to reach the
desired level in Turkey. This is a developing sector. Low insurance
levels and high insurable potential continues to draw the attention of
international investors to the Turkish insurance market. While only 15
firms operating in Turkey out of a total of 58 had international capital
in 2001, the number of firms with international capital has increased
significantly since 2008, reaching 44 at the end 2014.
What do London, Paris, and New York have in common? Increasingly, the
answer is Turkey. As reinsurance hubs around the world face soft market
conditions brought on by abundant capital and quiet catastrophe years,
underwriters are hungry for opportunities to drive profitable growth.
And while a wide range of mature market strategies may offer incremental
returns, they can't provide the near-term gains that the market craves.
The real solution is to bring more "original risk" to market — new
risks transferred into the global insurance and reinsurance community.
And that's where Turkey serves as a model for the future of the market.
Introduction of the unique methodology for calculating damage has contributed to reducing the number of litigations settled in a court between insurers and the MTPL clients. At the same time, the number of litigations settled in a court has fallen twice: the insured does not want to be judged or to pay court fees, therefore most of the litigations are settled out of court. Briefly, the parties have learnt to come to a mutual agreement. The only problem area which remains are the complaints regarding the method of calculation for "bonus-malus" (not everything depends on the insurers, car owners sometimes make mistakes in providing data).
The Government program for the implementation of an agricultural insurance institution in the country is still under development stage, and Armenian insurance companies are involved in this process but it is early to talk about any product. In order to involve insurance companies in agro-insurance there is a need to create a certain infrastructure and to appoint a regulator like the Motor Insurers' Bureau.
For VIG clients we are "per definition" their preferred reinsurer, but
we apply the same underwriting standards for Group and Non Group
business and for both segments we have to compete with other reinsurers
to win their business.
What are the main challenges for a CEE reinsurer, what are the main
challenges and opportunities for a specialist reinsurer and how can a
company can become a significant player in just 7 years? We invite you
to find out the answers in the following interview.
Given the fact that MILLI Re has been able to penetrate into most of the
target territories over the 9 year period, the main aim for the medium
term is to achieve further diversity in business written from these
markets by adding accounts which would be selected on the basis of their
potential profitability and related exposure and further reduce the
retro element in this book in order to avoid clash of exposures. MENA
region continues to be of vital importance to MILLI Re, followed by
Asia. We also see a strong potential to grow further with the CIS and
CEE countries as well as the African and Latin American regions.
I cannot say that something significantly occurred after this year's sanction extension - the effect from the "first wave" of sanctions was rather moderate and the biggest problem local players face is finding reinsurance capacity for their clients, who were unfortunate enough to be added to the sanction list. While most of such projects are rather small and capacity can be found locally the market does sometimes see risks valued above USD 1.0 billion, which makes them significantly harder to place.
Russian insurance community didn't succeed finding a proper, sufficient support from so called alternative markets (predominantly, from China, Asia, MENA) to cover the major portion of sanctioned exposure where the traditional Western markets can't be of support anymore. Thus, the ground for creating a state owned reinsurer looks reasonable to guarantee the high-valued state interests domestically and overseas with a stake on large scale projects (property, construction and cargo for international trade).
In order to reduce usage of foreign currency in settlement and to increase the public confidence in the national currency the National Bank of the Republic of Belarus has been taking measures to de-dollarization of the economy. Such measures also affected the insurance sector. Thus, from March 1st, 2015 insurance companies were interdicted to accept premiums from individuals in foreign currency. An exception was made for the two insurance companies engaged in life insurance, including supplementary pension insurance.
There aren't any type of compulsory insurance laws operating in the Georgia, which is one of the determining factor that in 2014 insurance GPW was of only 1.2% of the GDP. Still, the recent catastrophes have proved that the insurance companies have properly settled all their losses with the help of appropriate reinsurance mechanisms.
The first major challenge for the system is financial stability, which is the main topic we have to care about. We cannot assure the good and smooth handling of international claims if the financial stability of the Green Card System is not assured.
All Moldavian insurance companies will not be allowed to sell green card policies anymore, which means that they will lose an important part of their business. Another one, the Moldavian drivers will have no possibility to freely go outside of the country without purchasing frontier insurance. And frontier insurance is much more expensive than buying a green card here. Also, the Moldavian Bureau will still have to pay claims for policies sold before.
The most promising business line in Georgia, based on market capacity and potential, is the motor line. The point is that, among officially registered 900 000 vehicles, approximately 7% are insured with motor hull risks and about 6% are MTPL insurance holders. With the implementation of MTPL Law, which is planned for next year within the EU Association Agreement, the motor insurance has to become the line that fuels whole insurance industry.
The economic environment and the insurance market are fully correlated. Healthy growth of the insurance business is hardly possible without economic growth. Of course, we have been an example of an expanding business in the times of economic downturn, but this expansion also comes along immense managerial and organizational efforts.
The European Insurance Report 2015, released by SWISS Re in June 2015, is based on a survey of 13,000 people across 13 countries in Europe and the Middle East. The Report looks into attitudes towards what life and health insurance products people have in place, where the gaps are in their protection and focuses on possible solutions to help with the financial consequences of unexpected health shocks, especially for sudden disability or serious illness. According to the Report's findings, collectively, the total level of underinsurance in the countries surveyed is currently around EUR 750 billion. Assuming that people would need a 60% replacement income if unable to work because of illness or injury, the report finds that at current levels replacement income would barely cover 40% for most people.
Recently, SWISS Re organized their annual event dedicated to the Russian market - SWISS Re Summer Reception - and presented its plans and expectations regarding the development and future perspectives of the company on the Russian market. More than 100 representatives of the top insurance, reinsurance and brokerage companies attended the event in Moscow.
There is virtual no building in Germany, which doesn't have fire insurance. Additionally more than 90% of all buildings have an insurance cover against losses from hail and storm. 40% of all buildings do have an extended cover against natural hazards, including flood, heavy rainfall, snow pressure, subsidence, landslides, etc. In the past, the introduction of compulsory insurance against natural hazards was discussed over and over again. However, because in Germany we do have a working and efficient market for natural hazard insurance, there is no need for a compulsory solution.