RUSSIA: agro insurance in 1H2018 dropped by 36%

The agro insurance segment based on the Central Bank dropped by 36% to RUB 1.66 billion in the 1H 2018. The biggest contribution to the segment was made by agro insurance without state support (+2.8% to RUB 904.3 million), according to the National Association of Agriculture Insurers (NAAI).

Also, a big contribution was made by the subsidized livestock insurance market (RUB 457.1 million). According to Korney BIJDOV, the NAAI President, "agro insurance without state support is

extremely heterogeneous - most agreements are settled in several regions of the Volga area, while a major part of premiums originates from smaller agreements on insurance of large and medium agricultural production. Thus, reduction of the total number of agreements without state support, caused by macroeconomic trends, did not affect overall demand for insurance coverage which is mainly required for medium and large farms. Under conditions of decreasing state support, livestock producers must also reduce their insurance coverage," added BIJDOV.

He described the situation for crop production as well. "Crop production in 2018 is in the most vulnerable position, in terms of access to agro insurance with state support. Crop farmers, as a rule, are usually tightly bound by planting periods and can't wait until federal decisions on subsidy allocation are made to conclude insurance agreements. This is an extra argument in favor of the system recovery, when subsidies for insurance should have a special purpose", said BIJDOV.

The total number of insurers in the agro insurance market in 1H2018 was 27, 11 of which were active. The total number of concluded insurance agreements amounted to 38.8 thousand units (vs 42.4 thousand a year ago).

According to BIJDOV "preliminary estimates of loss volume for various emergency situations for agro producers in our country is between RUB 8.7-10 billion in 2018, meaning that insurance coverage against natural disasters is really insufficient. At the moment, NAAI and the Ministry of Agriculture are implementing measures, which should, first of all, change the insurance situation of crop production based on recommendations and orders of the government of the Russian Federation and the Russian Council of legislators. The amendments to the law on agro insurance with state support, adopted by the State Duma in the first reading in July and being prepared for further consideration this fall, should also improve the situation", explained BIJDOV.

*EUR 1 = RUB 72.9921 (30.06.2018)

Follow XPRIMM Publications on LinkedIn, for more data on the insurance and financial industry.

Share |

Related articles

RUSSIA: FITCH removed VSK from the Rating Watch Negative

The international rating agency FITCH removed the financial stability rating of VSK from the list of Rating Watch Negative (RWN), where it was placed in July 2018, as well as confirmed the company's rating at BB-, outlook negative, as reported by ASN.

2019-01-25

ON THE MOVE

Peter CLARKE named VP & COO of FAIRFAX

FAIRFAX Financial Holdings Limited announced that Peter CLARKE has been appointed Vice President (VP) and Chief Operating Officer (COO) of FAIRFAX, reporting to FAIRFAX President, Paul RIVETT.

12.02.2019

ERGO Group appoints a Polish manager

Adam ROMAN, board member of Ergo Hestia (Poland), will hold the position of Head of Global P&C of the ERGO group, effective 1 March. His tasks will include supervision over property insurance of the group in the areas of underwriting, actuarial and pricing, as well as reinsurance.

07.02.2019

TOP EVENT

Inclusive Insurance - a creative solution to narrow the protection gap in the emerging markets of the Southeastern Europe

Insurance should be accessible to all social classes, regardless of their wealth & income status. Products offered today are conventional insurance products, largely inspired from the developed markets as "one-size-fits-all" solutions, affordable to only middle- and high-income clients in the Eastern Europe's emerging & developing markets. Inclusive insurance's goal is making insurance available to all, with responsible insurance offers, thus making up for a solution to narrow the insurance coverage gap in the region.

14.02.2019

Latest trends and challenges in the property and motor insurance lines under scrutiny, in Vienna

Property and motor insurance lines are providing for about 75% of the non-life insurance business in the CEE region, but are responsible for over 77% of the claims expenses. As such, although other classes of risks are emerging, for the time being and most probably for a rather long period ahead, property and motor insurance lines will continue to be at the heart of CEE's insurance market architecture.

14.02.2019

FIAR 2019: Register before 28 February and save EUR 400 of the attendance fee

To the satisfaction of its traditional guests, FIAR returns in 2019 to its historical hometown, Sinaia. The forthcoming edition will benefit from the comfort and professional facilities of a new venue, the Conference Center of the International Hotel ****, located in the heart of the beautiful mountain resort. Registration is opened at a significantly discounted early bird rate until 28 February.

10.01.2019

See all