The year 2018 turned out to be more successful and creatively rich for the Russian insurance community than the previous one. The indicator of total premiums will exceed the forecasts of the All-Russian Union of Insurers (VSS). The planned increase in annual premiums was expected at a level of 13% against 8% in 2017, but was already achieved in the first nine months, the all-Russian fees broke the bar of 1 trillion rubles.
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As before, life insurers are among the leaders in terms of premium growth, their fees increased by 40% already in the first seven months (57% for the entire 2017).
The crisis in the OSAGO market in the outgoing year loosened its grip, giving a little respite to Russian auto insurers. The first results of the national campaign against insurance swindlers affected the reduction of unprofitability in OSAGO, the transition to in-kind payments in OSAGO (auto repair) in a number of regions added stability. Preparations for the start of liberalization in OSAGO became a global project, the preparation took the whole year, the reform itself will begin in 2019.
In the outgoing year, laws were adopted on home insurance against natural emergencies, on the financial ombudsman, on the rehabilitation of insurers, and on state support in agricultural insurance. All of them create new opportunities for the development of the insurance market. Insurers have passed the first stage of self-regulation, VSS, as a single self-regulatory organization, is entering 2019 with a new strategy and new performance standards, and the principles of interaction with consumers have been determined.
However, judging by the mood of insurers, all achievements are leveled by the general processes of stagnation in the market. If we factor out the results in life insurance, premiums for other types of insurance increased by only 4.9% - that is, approximately at the rate of inflation. True, this is better than the results of 2017, when the indicator decreased by 1.8% compared to 2016. Effective demand, according to Interfax survey participants, is declining both in the segment of legal entities and in the segment of individuals. Nevertheless, market leaders maintain an enviable return on capital (over 40%) and remain profitable. total collection rate at the level of 15%.
Start of OSAGO reform
In 2018, several events were planned, the start of which turned out to be delayed. The main expectation of the entire insurance market was the hope for the start of the reform in OSAGO, associated with changes in the tariff policy. This measure was supposed to stabilize the entire insurance sector. Preparations for the start of the OSAGO reform were carried out during the year, the key instruction of the Central Bank on expanding the tariff corridor and modernizing the calculation of the coefficient for emergency driving (bonus-malus) was sent in December to the Ministry of Justice for approval. The implementation of the first stage of the reform, the transition to the individualization of tariffs in OSAGO, the introduction of the “driver pays as he drives” principle will begin to take place in 2019 in stages.
At the first stage of the reform, the boundaries of the tariff corridor for insurers will be significantly expanded. At present, their spread in OSAGO is 20%, it is assumed that the boundaries of the corridor will go up and down by another 20%, the width of the tariff corridor will reach 60%. Instead of four values of the "age-experience" coefficient, 58 gradations will be introduced. The bonus-malus coefficient will also be reformed, the driver will be able to receive only one value of this coefficient once a year (April 1).
The average price of an OSAGO policy where insurers will raise tariffs after the Central Bank's instructions are issued, can grow by no more than 1.5%, Vladimir Chistyukhin, deputy chairman of the Bank of Russia, commented earlier on the prospects for the first wave of revision of tariffs in OSAGO. He noted that the price of OSAGO policies could be reduced in 30 regions of the Russian Federation in 2019.
Further liberalization of OSAGO will take place simultaneously with legislative changes. A number of amendments to the OSAGO law have been prepared by the Ministry of Finance, they are being discussed by the government and the presidential administration. While it is not clear to a number of lawyers how the amendments on the voluntary increase in insurance amounts in OSAGO, on the additional payment to the OSAGO tariff, proposed by the Ministry of Finance, are combined with the mandatory articles of the law on "autocitizenship", there are disputes at the level of legal technology. Nevertheless, all parties to the discussion, including the Central Bank, agree that the price of an OSAGO policy should take into account the individual characteristics of the driver to a greater extent, this principle will be consistently implemented.
As Deputy Minister of Finance Alexei Moiseev said, commenting on the prospects for the liberalization of OSAGO, by 2023-2025 it will be possible to think about the complete release of tariffs. In the meantime, the Central Bank, agreeing to expand tariff freedom for OSAGO insurers, at the same time initiates amendments to the legislation that will make it possible to control the validity of the tariffs used by the UK.
What was treated
The year 2018 itself brought a natural "mitigation of the disease" in the OSAGO segment, gave a little respite. According to the Russian Union of Motor Insurers (RSA), auto insurers' premiums for OSAGO for 11 months of the year remained practically unchanged and amounted to 206.3 billion rubles, but payments decreased by 23% - to 129.4 billion rubles. The trend of a leading decrease in the indicator of payments in OSAGO steadily manifested itself from quarter to quarter. Commenting on the improvement in the situation in OSAGO, auto insurers' experts associated this with the results of the fight against insurance fraudsters, with the impact of in-kind payments (they exclude the participation of fraudsters and unscrupulous auto lawyers from the process of receiving payments in OSAGO). However, there is another opinion. As shown by the Interfax survey of OSAGO insurers, the improvement in statistics in "
"In 2018, at OSAGO, we saw how the market works without the negative factor of Rosgosstrkh ( from the time of 2016-2017 with the previous shareholders, before the arrival of Otkritie Bank as the owner, before the supervision of the Central Bank - IF),” a representative of one of the leading auto insurers told Interfax. In his opinion, “the crisis in OSAGO itself was provoked by the policy of the former Rosgosstrakh, whose losses were stubbornly distributed to colleagues in the shop through various mechanisms. First, through mutual settlements between the direct insurer and the insurer of the person responsible for the accident. The average payout of Rosgosstrakh at that time was 50% higher than the average payout for the market as a whole. Particularly suspicious insurers admitted that "the case is unclean", similar to the withdrawal of funds from the company through dummy auto lawyers. After all, until recently, Rosgosstrakh had the glory of someone who mercilessly cuts auto insurance payments. However, no one could prove anything.
"In any case, if there had not been a negative impact on the segment of the former Rosgosstrakh with its policies, it would not have been necessary to create both the Single Agent system to ensure the purchase of paper policies by customers, and the E-Garant system to ensure electronic sales in segments or regions that are particularly unprofitable from the point of view of OSAGO. The decision of the Central Bank of 2017 to transfer Rosgosstrakh under the control of Otkritie Bank, the regulator's control over the position of the company was correct," the agency's interlocutor said. The policy of the new managers of Rosgosstrakh to block all possible channels for the outflow of money from the company, apparently, gave a result that was also felt by the entire OSAGO market.
Commenting on the results of PJSC IC Rosgosstrakh for 9 months of 2018, CEO Nikolaus Fry said that, taking into account the data for the Capital group (joined Rosgosstrakh in 2018), net profit under RAS amounted to 6 billion rubles, the amount of the premium reached 51.4 billion rubles. “Assessing the company’s result for three quarters, it should also be remembered that it was obtained taking into account the depreciation of some securities that remained in the company after the change of ownership. The securities lost a total of 3.2 billion rubles in value. Without these losses, the company’s performance would look even better," Fry told Interfax.
Help from legislators
From next year, the financial ombudsman service will become an institutional assistant for OSAGO insurers. The service was created to help clients of various financial institutions, but at the first stage it will provide assistance to insurers under OSAGO, then its competencies will expand. The advantage of the service will be the priority of pre-trial dispute resolution, a quick decision that is binding on the insurer. Until now, the main goal of auto lawyers who dream of making money on disputes in OSAGO has been to transfer the proceedings to court, while all penalties and fines, often exceeding the "body" of payment, went to the intermediary. The design of the law on the financial ombudsman is unfavorable to intermediaries acting on behalf of drivers, for them the services will be paid. The parties to the dispute retained the right to go to court, but at the next stage. Such a structure of legal dispute resolution will not only help policyholders to get a fair solution for free, but will become a tool in the fight against unscrupulous intermediaries. This means that it will reduce the influence of non-economic factors on the level of unprofitability in the "avtocitizen".
The financial ombudsman service will begin its work with the consideration of disputes on OSAGO in May 2019 without fail. Until then, auto insurers will be able to voluntarily cooperate with it. According to Igor Yurgens, president of the ARIA, "a number of insurance companies are ready to conclude contracts with the service, but it is not yet ready for this and is in the organizational stage."
According to the law, the institution of the financial ombudsman assumes mediation in the consideration of disputes between consumers of services and financial organizations. Yury Voronin, ex-adviser to the chairman of the Central Bank, former official of the government's social bloc, has been appointed chief financial officer for a period of 5 years. At the end of December, the Board of Directors of the Bank of Russia decided to appoint Viktor Klimov from January 9, 2019 to the position of financial commissioner for the rights of consumers of financial services in the field of insurance (Klimov is a member of the central headquarters of the ONF, the head of the project " For the rights of borrowers"). As Igor Yurgens explained to Interfax, there will be more than one insurance agent, their number will increase as the workload of the service expands. As previously reported, among the three candidates for the role of insurance ombudsmen are Klimov, executive vice-president of the ARIA Andrey Yuryev, as well as the first deputy chairman of the Social Insurance Fund Yevgeny Pisarevsky.
From 2020, the law will become mandatory for microfinance organizations, from 2021 - for banks, pawnshops and non-state pension funds.
Way out of the agricultural crisis
The acute focus of the crisis remained in agricultural insurance with state support. The National Union of Agricultural Insurers (NUA) predicts a decrease in collected premiums in agricultural insurance with state support in 2018 by 20% compared to the result of 2017, President of the NUA Korney Bizhdov said. He recalled that in 2017, the decline in fees was even more dramatic (a 56% collapse). The share of insured crops decreased by the end of 2018 to 1.5% compared to 12-15% a few years ago. For animal insurance, the situation is better - the share of insured livestock with state support in 2018 was 12.5%. According to the NSA, the total amount of premiums for agricultural insurance with state support as of December 1 of the outgoing year amounted to 1.8 billion rubles.
All year long agricultural insurers tried to convey their concerns to the government, relevant departments and legislators. The reason for the situation, according to the NSA, is the decision to include a subsidy for agricultural insurance with state support in the "unified state agricultural subsidy" in 2017.
“Today it is obvious that such a decision was a mistake,” Bizhdov told Interfax. “The Ministry of Agriculture, the government and legislators understand the origin of the problems in the segment, there are plans to correct the situation. 2019, and later it will be withdrawn from the general membership, such agreements have been reached with the Ministry of Agriculture.
In addition, at the end of 2018, the Ministry of Agriculture supported an experiment to develop an agricultural insurance model with state support in 22 regions of the Russian Federation. The experiment will start in 2019. "In the pilot regions, it is necessary not only to work out standard mechanisms for subsidized agricultural insurance, but also to create new practices, including index insurance. Starting next year, subsidies will be extended to aquaculture, including commercial fish. The rules for this new type of insurance are already being developed by the NSA," Bizhdov said.
Starting next year, a factor stimulating risk insurance for agricultural producers will be the adopted government decree on changing the procedure for paying compensation to farmers for damage from emergencies. According to the document, agricultural producers who have not insured risks will be able to count on 50% compensation for losses received from their calculated value for emergencies. In addition, regions that do not plan to insure agricultural risks on the terms of state support will receive "unrelated support" by 15% less ( subsidies for "unrelated support" are valued by the regions, since they can use these budget support funds at their discretion - IF ).
Home protection
The opening of the outgoing year can be considered the adoption of the law on home insurance against emergencies, which will come into force in August 2019. The bill was discussed for more than 5 years, spears were broken, insurers were tired of altering the text, they said that they had almost lost interest in the law. The text of the law adopted in 2018 is still criticized today, but it must be admitted that such an attempt to involve the entire population of the country in insurance of the underlying asset has not been made before. Home insurance by law is a voluntary business for the regions and residents of the country.
This is a fundamentally new idea to create conditions for the implementation of the All-Russian project of housing insurance protection. The law is a framework, specific content will be implemented at the stage of development of regional programs. The territorial coverage of this law is important, since the involvement of a large number of facilities located in different climatic and geographical zones will launch a mechanism for redistributing losses throughout the country. The situation when only the regions where these emergencies occur regularly is insured for emergencies is fraught with the so-called "negative risk selection".
The core of the home insurance program for each region will be natural disaster insurance. Thus, the participation of the federal and regional budgets in payments is expected when an emergency is declared. The presence of regional home insurance programs will allow the territories to form their own home insurance standards. Programs can cover not only the risks of emergencies, but the risks of damage or destruction of housing from a domestic gas explosion, flood, fire, and other risks. At the same time, the expansion of the list of risks is possible due to the proposals of commercial insurers directly in the contract with the insured. At the core of the program, commercial insurers participate as contracting and negotiating agents. In terms of insurance for the core of the program (risks of loss or serious damage to housing from emergencies), according to the law, 95% of the premium is transferred " a little over 300 rubles a year). The insurance payment for the complete loss of housing from emergencies will be at the level of 300-500 thousand rubles (the exact figure will be determined by a government decree). As a result, insurers will receive few premiums and access to a wide customer base of individuals. They will be able to compete for customer attention by creating interesting service offerings on a voluntary basis. a little more than 300 rubles a year). The insurance payment for the complete loss of housing from emergencies will be at the level of 300-500 thousand rubles (the exact figure will be determined by a government decree). As a result, insurers will receive few premiums and access to a wide customer base of individuals. They will be able to compete for customer attention by creating interesting service offerings on a voluntary basis.
The Moscow program of voluntary home insurance, which has been implemented for many years and covers about 70% of the capital's apartments, has been declared a model for organizing home insurance. Insurers believe that the key technical point of the Moscow program is the possibility of including an insurance payment in a utility bill at the request of the apartment owner.
For the first time, the law and by-laws have made an attempt to gather "in a fist" all the components within the framework of compensation for damages for the loss of housing to citizens from emergencies, including the possibilities of the federal and regional budgets. Additional expenses are not expected, it is supposed to use funds under the item of expenses for compensation for damage during the elimination of the consequences of emergencies, insurance payments from commercial insurers and the state reinsurer - RNPK will be added.
The Ministry of Finance was the author of the bill, and its calculations show that citizens who lost their homes during an emergency will receive a payment several times higher compared to the compensation levels that were in effect before the adoption of the law. New home insurance programs are beneficial to the regions. This allows us to optimize the spending of reserve funds for emergencies, to ensure savings on budget expenditure items, believes Vera Balakireva, deputy head of the financial policy department of the Ministry of Finance. She told Interfax that in the case when victims are provided with housing to replace those lost during emergencies, the insurance payment will go to the regional budget and replenish it.
According to Nikolai Galushin, head of the RNPK, all 85 constituent entities of the Russian Federation are ready to accept their insurance programs by law - it is important that this does not turn out to be a mere formality.
The main merit of life
At a December meeting, the head of the ARIA, Igor Yurgens, shared with journalists a forecast according to which the overall increase in premiums by the end of this year is expected to be at the level of 13%. Next year, according to him, the growth rate will continue - 12-15% compared to 2018.
Premiums of Russian insurers for 9 months of 2018 increased by 14%, payments decreased by 7%, according to the Bank of Russia. At the same time, the indicator of total fees for the first three quarters broke the bar of 1 trillion rubles (1.093 trillion rubles). At the end of 2017, the total premiums of insurers amounted to 1.278 trillion rubles, they increased by 8.2% compared to 2016.
Based on the results of 9 months of 2018, life insurance remains the growth driver, premiums for this type of insurance in January-September increased by 40.7%, to 324.9 billion rubles. The share of the segment reached 29.7% of the volume of total premiums, at the end of 2018 this figure will confidently reach 30%. According to the forecast given by Yurgens, next year the share of the flagship life insurance segment will grow to 35% in the total market structure. ( Ten years ago, the share of classic life insurance in total collections barely reached a few percent. In a number of developed countries, this figure exceeds 50% - IF ).
According to the results of 9 months, the most dramatic decrease in fees was demonstrated by agricultural insurance (-14.3%) and liability insurance (-9.2%). Property insurance fees for legal entities decreased by 4%, while for individuals, on the contrary, increased by 10.6%. For non-life insurers, the largest increase was in accident insurance (30.3%), all personal types grew by 17%, cargo insurance - by 11%, VMI - by 7.4%.
The share of compulsory insurance will slightly decrease in the overall structure of fees and will reach 17% by the end of 2018 (of which 15% falls on OSAGO). The share of voluntary insurance, respectively, will be equal to 83% in the total structure of fees for the outgoing year. At the end of 2017, the ratio of these indicators was at the level of 20% and 80%, in 2016 - 22% and 78%, respectively.
Analyzing the data of the Central Bank for 9 months, Vice-Rector of the Financial University under the Government of the Russian Federation Alexei Zubets drew attention to the downward trend in the level of the average premium per insurance contract. Insurance contracts are shrinking.
"In terms of collected premiums, the market grew by 14% in the third quarter, while the number of concluded contracts increased by 22% compared to the third quarter of last year. In life insurance, the amount of collected premiums increased by 33%, and the number of concluded contracts - by 56% In the motor vehicle hull insurance segment, we see a similar picture - the growth of the premium and the number of concluded contracts amounted to 3% and 22%, respectively, in the insurance of citizens' real estate - 9% and 27%, in OSAGO - 3% and 22%, respectively. in insurance of property of enterprises, premiums decreased by 15%, while the number of concluded contracts increased by 28%," said Oleksiy Zubets.
Formation of a monopolist
The most anticipated deal in 2018 on the insurance market was the merger of the largest insurer, SOGAZ, with another major company, VTB Insurance. They started talking about this deal back in 2017, but the parties officially announced it only in the second half of 2018, and then without details, and in November the VTB Group and SOGAZ closed the deal.
The perimeter of the transaction included all companies of the VTB Insurance group, including VTB Life Insurance and VTB Medical Insurance. At the same time, VTB Group received 10% of the shares and a seat on the board of directors of the combined company, as well as cash compensation. Throughout 2019, most likely, IC VTB Insurance will exist as a separate subsidiary of SOGAZ and operate under its own brand, the final merger is planned only at the end of the year.
According to an insurance market expert, the merger procedure will take at least two years. He said that fears of insurers related to the appearance of a super-insurer following this deal remain. According to preliminary estimates, the SOGAZ deal creates a conglomerate with a market share of almost 1/5 or more than 330 billion rubles in total premiums.
According to the results of 9 months of 2018, SOGAZ showed a very modest premium growth rate of 1.5% (up to 140.8 billion rubles), while the entire market grew by almost 14%. The total market share of the company also decreased - from 14.4% to 12.9%. For the company's key type of insurance - corporate property insurance - SOGAZ showed a reduction in premiums by 19% against the backdrop of a decrease in general market fees for this type of business by 3.9%. SOGAZ's personal property insurance fees decreased by 1.7% over 9 months against the backdrop of a 10.6% growth in the market. Hazardous facility owner liability insurance showed a 2% reduction. At the same time, the company most significantly increased fees for agricultural insurance (by 109% due to a low base) and financial risk insurance (by 169%).
Commenting on the results of 9 months of SOGAZ, an insurance market expert noted that "the third quarter is not indicative for such an insurer", the fourth quarter accounts for a significant part of tenders in the corporate insurance segment. Indeed, according to information on the public procurement portal, in December 2018 SOGAZ became the only participant and winner of a multi-lot open request for proposals for insurance of property, liability, as well as life and health of employees of Gazprom and 28 of its subsidiaries. Insurance contracts were concluded for a period of two years - from 2019 to 2020. The insurer's premium for all lots is 22 billion rubles. The property will be insured for 1 trillion rubles with a premium of 2.2 billion rubles. Under compulsory insurance contracts for hazardous production facilities (HPOs), the insured amount is 71.8 billion rubles, the premium is 219.9 million rubles. For Casco and OSAGO, the insurer will receive another 1.2 billion rubles in fees. In addition, SOGAZ will insure employees of Gazprom and its subsidiaries under voluntary medical insurance contracts (a premium of 17.6 billion rubles), as well as against accidents and illnesses (331.8 million rubles) and life insurance (72.2 million rubles). In past years, SOGAZ was also the main insurer of Gazprom's property and liability. as well as against accidents and illnesses (331.8 million rubles) and life insurance (72.2 million rubles). In past years, SOGAZ was also the main insurer of Gazprom's property and liability. as well as against accidents and illnesses (331.8 million rubles) and life insurance (72.2 million rubles). In past years, SOGAZ was also the main insurer of Gazprom's property and liability.
Enviable profitability
The results of the investment activity of Russian insurers turned out to be lower than expected, Deputy General Director of Ingosstrakh Ilya Solomatin told Interfax. "They were negatively affected by sanctions, inflation, currency market volatility and general financial market instability," he said. At the same time, in his opinion, "in the insurance market, strong companies complete the year 2018 with a profit."
According to the Central Bank of the Russian Federation, the average return on equity of the five largest insurance companies in terms of collections in the universal insurance segment was 40.6% over the first 9 months. "At the same time, for insurers of the second size group (6-20th positions in the ranking of insurance premiums) this figure was 1.7 times lower, and for insurers of the third size group (21-50th positions) - 1 .5 times. For those not included in the group of the 50 largest insurance companies, in terms of premium collection, the indicator turned out to be 2.8 times lower, "the review of the Central Bank notes.
Since the beginning of this year, the return on equity in the banking sector has increased from 8.3% to 13.3% as of November 1, 2018 (excluding credit institutions undergoing financial rehabilitation, the figure was 17.0%), the Central Bank said.
Unfortunately, an important international indicator of the ratio of insurance premiums (excluding mandatory medical insurance) to GDP has practically not been growing in recent years. According to the Central Bank, it amounted to 1.34% in the third quarter of 2018 - this figure remained virtually unchanged compared to the same period in 2017 (1.32%). At the end of 2017, according to the Central Bank of the Russian Federation, the indicator reached 1.39% of GDP.
Your own strategists
The ARIA at its meeting on November 28 approved a new strategy for the development of the insurance market of the Russian Federation until 2022. Next year, the union plans to focus on the development and reform of four types of insurance: OSAGO, home insurance against emergencies, life insurance and compulsory medical insurance. The previous strategy for the development of the insurance market was approved by a government decree for the period until 2020, it has not yet expired, however, as the audit of the Accounts Chamber of the Russian Federation showed, most of the digital indicators laid down in it will not be achieved. The government's strategy was developed and approved in an era of economic recovery; it cannot take into account crises, stagnation, or sanctions.
"For the first time, the strategy for the development of the insurance market is not a document that "comes down from above" and is determined by some political tasks, but an extensive map prepared by the insurers themselves and specialists in this field," said Igor Yurgens, president of the ARIA. "The ARIA working group spent a lot forces in order to form the main blocks of tasks in key areas, taking into account the interests and opinions of all members of the union.For the first time, the strategy of the union is adopted by the ARIA as a self-regulatory organization.This will allow monitoring the implementation of the strategy through the annual approval of plans by the general meeting of the union.It is also very important that the strategy managed to reach a consensus not only among the insurance market participants, but also the government and the Bank of Russia.
The change in the strategy preparation center is significant. Whereas earlier insurers were relying more and more on the help and support of their business from the government, on the constant expansion of the range of types of compulsory insurance, now they are forced to concentrate their own forces to determine the fate of their market and rely on them. The idea of imputed types of insurance mandatory for clients due to professional requirements did not justify itself, the Ministry of Finance suggested that the government refuse to use such liability insurance of market entities to recognize such contracts as financial guarantees. Now they are looking for ways to interest insurers in voluntary protection of risks.
The main directions in the ARIA strategy will be the development of the infrastructure of the insurance market, increasing the confidence of citizens in the insurance institution, the development of electronic insurance, counteracting unfair practices, including the fight against insurance fraud. Also, the list of tasks for the next three years included the issues of reducing the regulatory burden on insurers, the liberalization of OSAGO, the development of the life insurance market and the improvement of the compulsory medical insurance system in terms of introducing classical insurance principles. The priority areas in the strategy will be those areas that the Central Bank, as a regulator, has laid down in the global strategy for the development of the financial market - OSAGO, CHI, life and housing insurance.
In the near future, a "road map" will be developed for each of the key areas of the strategy, each area or task will be assigned to the Vice-President of the ARIA with KPIs tied to the implementation of strategic goals, Yurgens explained to Interfax.
"Regardless of the conditions under which the Russian economy will exist in the near future, regardless of the tightening of sanctions or other political events, Russian insurers intend to fulfill the tasks set by the strategy to the best of their ability, no matter what happens outside. And this is the strength of our strategy," - convinced the president of the WCC.
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