Intense competition, difficulties in appropriate pricing because of lacking actuarial data, unresolved legal issues, unfinished privatization as well overall economic instability stalling development are some of the main findings of the latest report issued by S&P Global rating on the ex-Yugoslavian insurance markets (Insurance In Ex-Yugoslavia 25 Years After Dissolution: Is The Gap Closing?)
S&P assesses insurance industry and country risk for the Russian
property / casualty (P/C) insurance sector as high. Our assessment, which
covers both personal and commercial lines, reflects our view of the high
country risk and moderate industry risk that affects this sector.
In the first half of 2016 the Russian economy "shrank" and the fall affected all sectors of the economy. Moreover, the official forecasts about the end of the crisis were ambiguous. Despite this, experts forecast the recovery and growth of the economy in the current year. At the same time, the situation in the banking sector inspires "cautious optimism". So, at the end of the 2nd quarter of 2016 the banking sector has become profitable even without data from SBERBANK Russia (Figure 1).
Over the last few years, the Russian insurers have tended to characterize insurance fraud as one of the most actual threats to their business. It would not be appropriate to say that there were no measures taken in order to reduce this phenomenon. Once they've considered, for example, that introducing a distinct article in the Russian criminal code dedicated to fraud will substantially solve this issue. As a result, in 2012 a special article was introduced in the criminal code (No.159, paragraph 5) - insurance fraud. However, the situation has not improved - on the contrary, it got worse.
Motor insurance lines, such as MTPL and Motor Hull, remain the most popular retail insurance products in Kazakhstan. Thus, in the first half of 2016 the market share of motor insurance in the total GWP totaled 17.3% and 19% in 2015.
Solvency II has always been seen by many as the Area 51 of the insurance world - mainly due to its technical nature - journalists and other stakeholders alike. It has something almost mystical about it... you know it's something - but you don't always get it! However, this article is not about Solvency II per se. It is about the coming of age of the consumer landscape. And it is about the future. It is about how consumers truly became stakeholders and why they need to be involved in writing good regulation more and more.
As negotiations for the 2017 reinsurance contracts begin in Monte Carlo, business conditions for the global reinsurance industry remain weak. S&P Global Ratings expects prices to continue declining in the absence of a very large loss. The soft cycle is proving to be deeper and longer than many market participants anticipated in 2013, with falling premiums increased competition putting pressure on reinsurers' top and bottom lines.
As mentioned in one of the recent industry articles
"While in recent years the main priority for investors was finding
yield, last year the focus turned to preserving capital. One asset class
that promises to deliver both good income and decorrelation from the
wider financial markets is insurance-linked securities (ILS)".
The mutual insurance sector has undergone a modest recovery in recent years, says Swiss Re's latest sigma report "Mutual insurance in the 21st century: back to the future?" Mutual insurers' share of the overall insurance market increased from 24% of direct premiums written in 2007 to just over 26% in 2014, reversing some of the declines of previous decades.
Heraclitus quoted in nearly in 500 BC, "There is nothing permanent except change". Or in other words, "Everything changes and nothing stands still". In other words, Plato said "You could not step twice into the same river". From time to time, history have proved that the statement of these wise men true.