After the unprecedented financial aid in the amount of more than RUB 1 trillion to OTRKITIE Bank and RUB 100 billion to ROSGOSSTRAKH, another big problem may appear in the Russian insurance market, which will cost several hundreds of millions - the Central Bank may start soon financial rehabilitation of the insurer PROMINSTRAKH and the cost may break the record for the financial market.
PROMINSTRAKH is the successor of RINKO, previous leader of contractors' liability. At that RINKO made no claim payments neither in 2016, nor in 2017. Thus PROMINSTRAKH may soon be requested to pay about RUB 30 billion to constructors who are under bankruptcy proceedings, and this is just the beginning. At that official charter capital of PROMINSTRAKH is RUB 648 million only. According to experts after 2-3 claims in the amount of several billions such insurers have to stop their activity due to inefficient estimation of risks, capabilities, absence of any contractors liability insurance experience and reinsurance coverage. Based on the preliminary evaluation in PROMISTRAKH case the Central Bank may spend at least RUB 150 billion for financial rehabilitation during the nearest 2-3 years.
In terms of rating, before acceptance of RINKO portfolio PROMINSTRAKH had RAEX (national rating) A(II) rating, but after RINKO case the national rating was decreased to ruBB- (under watch).
Based on 2017 result PROMINSTRAKH had 35th place by GWP.
A comprehensive analysis of the Russian insurance market's performance in 2017 will be available in the forthcoming issue of the specialized publication "INSURANCE Profile Russia FY2017", will be officially launched on April 10th.
The biannual bilingual publication (Russian and English) includes the FY2017 financial results of the insurance market, from GWP and mediated premiums to claims paid, but also aspects such as reinsurance statistical data, the insurance companies' GWP portfolios etc., as well as the status of the Russian reinsurance market and perspectives of reinsurance market alongside of the new partner - RNRC: statistical data and market opinions.
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