Recent premium growth in Russian compulsory motor third-party liability (MTPL) insurance was exhausted by mid-2016, Fitch Ratings says in a report published today. Meanwhile, MTPL loss trends will continue to deteriorate. Fitch believes that reserving adequacy remains a key risk for the shrinking number of underwriters in the segment as regulation remains tight for premiums and claims, and the regulator is increasingly clamping down on insurers seeking to avoid exposure to regions with the highest loss ratios.

Compulsory MTPL insurance was the fastest growing line in the Russian non-life insurance sector in 2015-1H16. Its weight in the sector's primary premiums increased to 24.5% in 2015 from 17.2% in 2014, and to 22.7% in 1H16 from 20.2% in 1H15. The line prevented the local non-life insurance sector from shrinking in 2015. With MTPL excluded, the sector would have reported a 7% contraction in primary premiums written in 2015. MTPL premiums grew because of two series of MTPL base-tariff increases by the regulator from 4Q14 and from 2Q15.
Read the full story RUSSIA, Fitch: Motor Liability Insurance Premium Growth to Slow