RUSSIA: MTPL premiums and paid claims dropped in the first half of the year

According to the preliminary data of the Russian Association of Motor Insurers (RAMI) total MTPL premiums in the first half year in 2018 amounted to RUB 109.08 billion*, -1.4% compared to the same period of the last year.

Total MTPL paid claims dropped by 31% to RUB 68.1 billion against a declining trend of the average compensation amount and MTPL premium for the first half year. Average MTPL compensation payment for January-June 2018 decreased by 16%, and the average premium lost 1.3%.

The President of RAMI Igor YURGENS believes that "dropping of paid claims first of all is based on expanding practice of MTPL in-kind compensation. As a rule, insurers try to increase use of in-kind compensation in the regions very sensitive to the so called traffic lawyers' criminal activity...Another reason for the decrease of average compensation payment is declining number of accidents for the period under consideration and thus the total number of insurance events".

According to RAMI the frequency of insurance events in the country for the first quarter of 2018 amounted to 5.7% (vs 7.1% a year ago), which speaks for that drivers make accidents less and more actively use in-kind compensation in MTPL, added the President of RAMI. YURGENS thinks that a declining trend of the average premium is based on increase of the number of drivers eligible for an MTPL discount (no-claims bonus). Total number of MTPL policies in the first half year remained unchanged if compared to the same period last year, wrote ASN portal.

*EUR 1 = RUB 72.9921 (as of 30.06.2018)

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