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All you need to know about insurance in Russia
Andrey Panov, General Manager and Alexander Davydov, Head of the International Department of GrECo Russia talk about the domination of local insurance companies, mandatory requirements and what companies should know about international programmes in Russia.
Andrey, what are the key facts and numbers of the Russian insurance market?
PANOV : The russian indemnity market started to form in begin of 90s, when the first commercial companies appeared. Before this, during the Soviet Union period, there were only two state insurers : Rosgosstrakh, dedicated to domestic personal indemnity and Ingosstrakh, focused on foreign trade operations.
today the sum total of insurers amounts to 167 with a full gross written premium ( GWP ) of about 25 billion RUR. roughly 70 % of the GPW is lone collected by the top 10 insurers. From a regional position about 60 % of the GWP is booked in Moscow .
National companies are dominating the grocery store while international companies are represented by bantam cover teams signing chiefly reinsurance lines and servicing ball-shaped programs lead by their offices from abroad .
The dominance of local policy players can besides be observed when it comes to distribution channels. Foreign brokers are not allowed to place/service in Russia, except for reinsurance. e-commerce is now a chief swerve, but there are calm many issues with implementation .
What scope of insurance products do you recommend for an international company operating in Russia?
PANOV : Most of the international companies in Russia benefit from a master policy overlay which normally provides qualitative Property, Casualty and D & O policy .
In summation, good grocery store practice is to purchase locally Voluntary Health Insurance and Accident policy for employees, Motor Casco and MTPL .
sometimes, locations in Russia can not be covered by ball-shaped programs or have a restrict report – in this situation russian insurers have adequate capacity and timbre personnel to extend the overlay as required .
Are there any mandatory insurances in Russia?
PANOV : There are many types of insurances in Russia which they call compulsory or mandate. however, most of those are called therefore in legislation while the true compulsory insurance definition is classify of insurance which is regulated by a extra Federal Law regarding this particular class of policy .
The compulsory types of insurance by Law are Motor Third Party Liability, Passengers Carriers ’ Liability and Liability of High Hazardous Objects. There are three more but they are specific for a certain group of state employees and tourist agencies.
Who are the key carriers (insurance companies) capable to work with a master policy (global program) and handling administration and claims?
PANOV : In Russia all the major external insurers such as AIG, CHUBB, Zurich, Allianz and HDI are represented. They service large portfolios of external accounts. aside from them, only few russian carries have this commit, such as Ingosstrakh, RESO and Alfa .
Please tell us about the main specifics of the Russian insurance market in relation to global programs.
DAVYDOV : First of all, insurance from overseas is not admitted. Therefore a local anesthetic policy issued by russian insurance company is needed to cover risks in Russia. additionally, there is a compulsory ceding to the russian National Reinsurance Company ( RNRC ) that was set up in 2016 .
policy wordings and rates have to be filed with the regulator. therefore, DIC/DIL ( remainder in conditions / difference in limits ) is required to fill the col in coverage and the allotment of premiums to local entities can not be below the minimal filed rate. The use of a link clause does not work in Russia. This means, that high limits on local anesthetic policies within the international policy do not benefit the ball-shaped platform, major losses are to be paid by the victor policy on HQ level. besides, co-insurance is uncommon on the russian market .
We do not have cash before cover regulations, a payment term from 14 to 30 days is grocery store exercise. This does not apply to motive and compulsory lines. however, it is not allowed to back-date policies. therefore, we recommend silent renewals to avoid gaps in coverage. Another factor influencing the indemnity coverage is the gamble of exchange rate changes that impingement reinsurance, evaluation ( underinsurance ) and budgeting. There is no insurance tax in Russia and premiums of certain types of insurance can be deducted from taxes .
Can you explain in more details, how the compulsory local ceding to National Reinsurer works?
PANOV : In accordance with the Federal Law, all policy companies in Russia are obliged to offer to 10 % of any reinsurance transaction to RNRC. RNRC can accept or decline, unless this is not a “ sanctioned ” risk ( indemnity for the entity being under international sanctions ). RNRC can not dictate its rates, and should accept on slip pace and follow the decision of the leading insurance company. RNRC is 100 % owned by Central Bank of Russia .
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Andrey joined GrECo International Insurance Brokers JSC in 2013 and commenced a character as General Director specialising in large property and construction risks. Andrey has previously worked at AIG Russia and INGOSSTRAKH Insurance Company. Andrey has extensive experience in the invention and placement of international indemnity programs across a stove of lines of clientele including PD/BI, CAR/EAR, Casualty, Directors and Officers Liability and Marine Cargo .
Global Programs Department Leader,
Alexander joined GrECo International Insurance Brokers JSC in 2014. He is in the corporate indemnity industry since 2004 working for respective international insurers and broking firms. At GrECo Alexander is leading the team handling all international clients a well as the relation to our co-brokers in Eurasia .