NBR: Life insurance was the growth driver in 2016; market consolidation to continue

"Developing online sales and fraud reduction are among the main priorities of the Russian market in 2017," said Dmitry KUDLOV, Head of the Methodological Unit of Voluntary Insurance, Insurance Supervision Dept., NBR.

Speaking at the XIth edition of the International Conference "Insurance in Central Asia", the NBR (National Bank of the Russian Federation) representative presented some of the key indicators of the Russian insurance market in 2016. He stressed out that "the life insurance segment was the driver of growth for the Russian market in 2016, amounting 18% of the market, while GWP for the MTPL line rose by 7.2% and the Motor Hull class saw a decreasing trend. Overall, GWP amounted to RUB 215 billion, while claims paid were of RUB 30 billion".

He also said that "78 companies left the Russian market in 2016, but the market was not affected by their leave, as a stake of 77% of the overall GWP is controlled by the Top 20 companies".

In fact, the decreasing number of players in the Russian market is mostly a result of the regulatory initiatives aiming to "clean" the market, maintaining only financially stable companies. At the end of current year it is expected that less than 200 companies remain on the market. The "cleaning" process of the market may extend over the next two years.

Tightening capitalization requirements already led to an intensified M&A process or the liquidation of some health insurers. Moreover, starting 1st January 2018 it is planned to raise the requirements for the minimum authorized capital for insurers from RUB 120 million to RUB 300 million, and for the companies which are licensed for reinsurance - from RUB 480 million to RUB 600 million. Tighter regulations and the consolidation of the insurance market will undoubtedly have a positive impact on the transparency and stability of insurance companies, as well as on the quality of services offered.

Find a comprehensive presentation of the Russian insurance market's results in 2016 and perspectives for the near future in the latest edition of the XPRIMM Insurance Profile RUSSIA - FY 2016. Click here to order your copy.



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