In 2018 GWP of Motor Hull class will continue the downsize trend despite the growth of the passenger cars market, as informed by the national rating agency EXPERT RA.

According to experts insurance market is not growing together with the automobile one due to dropping personal incomes and expansion of franchise. Russian Motor Hull class has been declining already during 3 years and this trend will continue in 2018 despite the recovered car sales and decreased loan interests.

Total volume of Motor Hull GWP this year will be 3-5% less than in 2017. The main reasons of the class declining trend will be low personal income growth and reduction of an average policy price due to advanced use of franchise, since insured persons cut their costs and choose policies with partial coverage or franchise which leads to the premium decrease, - said ACRA analyst Alexey BREDIKHIN.

Based on the data, published by the Central Bank of Russia, in 2017 motor insurance showed the worst result since 2010 and amounted to RUB 162 billion (EUR 2.35 billion). Reduction of Motor Hull GWP started after the crisis of 2014 which led to decrease of personal incomes, inflation growth and dropping car sales that directly influence the Motor insurance segment. In 2015 the volume of motor insurance dropped by 14.3%, in 2016 - again by 8.8%, said experts. In 2017 Motor Hull exits the TOP-3 classes leading by GWP yielding precession to VHI, Life and MTPL.

2017 was a make-or-break year for the Russian automobile market. After 4 years of recession during which the market reduced more than by half in March it climbed into positive territory and in May showed double-digit growth rate - by 14.7% first time after the crisis. 2017 sales amounted to 1.59 million units of light motor and light commercial vehicles which is 11.9% more than in 2016. Against the reduction of loan interest rates in 2017 the number of new loans in auto lending increased by 25% and volume of loans provided increased by 36% up to RUB 333.35 billion (EUR 4.84 billion). Average new auto loan amount grew by 9% from RUB 701 thousand (EUR 10 thousand) to RUB 764 thousand (EUR 11 thousand). However, almost half of all policies are excess policies which cut the policy price up to 80% and this led to reduction of Motor Hull GWP in 2017 by 7%, - said Deputy General Director on property insurance of ERGO Maria BARSOVA.

Nevertheless, insurers and the agency believe that under positive macroeconomic environment the Motor Hull class may start to recover until 2019. The Director of FITCH insurance analytical group Anastasia LITVINOVA thinks that dropping trend of the Motor Hull against growing new car sales is slowing down. In this regard insurers are searching new opportunities of tariff reduction, using information about clients and insured objects, and offering the most advanced ways of calculation and issuance of policies. Probably behind time but the Motor Hull class will come back to the positive dynamics.

• Exchange rate as at December 31, 2017: 1 EUR = 68.8668 RUB

More details on the matter can be found 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.