Weak points of the Russian insurance market

"If the insurance - it is not in Russia, if Russia - it is not insurance, if insurance in Russia - it is not now" - a sad joke told recently from the podium Insurance Forum Partner Ernst & Young, Alex Korogodsky. Most Western investors continue to stop the opacity of the Russian market, its weak capitalization and a high loss factor, the high costs of doing business and low level of underwriting, as well as lawlessness mediators dictating the prices of their services. In this sense, the last in 2010 did not bring anything new to the market. The growth of premiums returned, but the problems and pain points remain the same. Faster than GDP. Charges insurers last year grew faster than GDP. This was stated by Deputy Finance Minister Alexei Savatyugin, speaking February 15 at the Congress of All-Russian Insurance Association (ARIA). According to him, the total premiums for 2010 increased by 6.5%. Trend of sustained growth and to support the FISA, which last week summed up in 2010. According to authorities, the crisis is not only stopped falling, the market for a year it completely "played", skipping, finally, the mark of 1 trillion rubles-lei. In total, collected more than 1.041 trillion rubles, while in 2009 the total volume of premiums amounted to 978 billion, and in 2008 - 952 billion, however, if you look at market rates, dropping fees for compulsory health insurance, growth will be less impressive. The real volume of the market (without OMC) to the beginning of this year amounted to 555.8 billion rubles - about 0.8 billion more than in the affluent to insurers in 2008. According to Rosstrakhnadzor, last year showed a growth of almost all lines of business. The leader was life insurance - premiums in this segment grew by as much as 37%. According to the head of the accounting and economic analysis, FSIS Tatiana Maiorova, this is partly due to the reduction of bank sales channel. True, the aggregate fees of life insurers is still negligible - their share of just above 2%. The other driver - voluntary private insurance, it has added 19.7%. 6.8% increase in premiums for CTP. And even property insurance, which is especially slip into a crisis year 2009 showed an increase of 3.5%. But the joy is premature. According to Tatyana Maiorova, regional markets have not yet returned to pre-crisis level. Increase in fees provided Central Federal District (9.5%). Only in this region blocked the pre-crisis volume indicators. Though it is necessary to take into account the fact that the share CFD has more than half of all awards. On the way to new standards. "The market is growing, but problems remain," - commented on the statistics FSIS head of the agency Alexander Koval. A large part of the companies (41%) still shows the drop in fees. Approximately 15% of them drop in premiums amounted to more than 50%. Problems remain with an authorized capital of insurers. Its total volume for the year grew by only 3.3% by the end of the year it was 153.2 billion rubles-lei. Slightly better is the average share capital (the rate of one company) - 248 million rubles, an increase over the year by 17.5%. But that's not enough. "71% of companies today do not meet the new requirements relating to authorized capital. The cumulative deficit of share capital - 54.3 billion rubles ", - told reporters Tatiana Mayorov. Only 147 companies now meet the new standards. "Over the Threshold" are reinsurers 113 out of 173, 57 life insurers out of 63, 184 property insurer of the 278 and 87 out of 104 health insurers. As for the quality of assets, and there are no serious changes. About a third of sanctions applied to the supervision of insurers, has been associated with the violation of the structure and placement of insurance reserves and own funds. "The number of bank bills fell doubtful nature, but in the structure of reserves and equity issuers appear questionable actions", - told reporters Alexander Koval. Rosstrakhnadzor also reviewed the amount of guarantees and warranties issued by insurers of last year. According to Tatyana Maiorova, in 2010 the company issued 41 guarantees and guarantees totaling $ 24.9 billion rubles, "This is 18% of the total equity of 41. In 22 companies the amount of such liabilities in excess of allowed bars to 5%. And the two companies generally guarantee the value exceeds its own means ", - said Tatiana Mayorov. According to her, such liabilities are a potential threat to financial stability of companies. RMA seeks up. Vitiate the position of the companies and the high cost of doing business (HPH). The Russian insurers in the past year, the RMA twice the rate of European companies. According to "Expert RA", in 2008, the average RVD in domestic companies was 41% in 2009 - 43%. This large figure is not surprising, since the level of the WFD depends on the agent's commission for the contract of insurance and the insurer's internal costs. Meanwhile, commission expenses in the Russian market are often higher than 40%. "In developed countries with established market of insurance services for the agent is most important long-term relationship with a client so it builds its portfolio" from a client. " In Russia, the market is still young, and a mature culture of the agency no. For most agents, the decisive factor in entering into a contract with the customer is the amount of commission. Realizing this, insurers in the struggle for Agents (agent here in the broadest concept - an agent, broker, dealer, bank, etc.) are often unnecessarily inflate the amount of compensation, increasing its share of the premium "- explains the situation Sanal Ushanov, Director financial practices of the consulting company Accenture in Russia. Clearly, in a highly competitive for the customer to insurers is difficult to deal with the existing situation. "If we talk about the internal costs of the insurer, there is, first of all, it is worth noting a serious gap in the field of optimization and automation of internal processes. And not only from Western insurance companies, but also from the players more developed markets of Russia - banks, telecommunications services. This makes employees work less efficient and therefore more expensive "- said Sanal Ushanov. At this low level of automation and process efficiency affects not only the high level of RVD, but also on the quality of customer service. According to Sanal Ushanov, there are other issues that contribute to the growth of the RMA: a lack of effective control over the regional network, a low level of cross-selling, as well as poor quality data on which the insurers are taking management decisions. In the struggle with the schemes. Opacity of the market into the hands of those who use the insurance for illegal purposes. The share of the insurance schemes now account for 8-8.5% of total fees, which is about 800-900 billion rubles. These data led to the BCC congress leader organization's management oversight Rosfinmonitoring Vitaly Chernov. According to him, the most "schematic" are the kinds of insurance, involving the budget. This insurance of agricultural risks, cargo, liability, construction risks, assets of legal entities from fire. In 2010, the Federal Financial Monitoring Service recorded a substantial withdrawal of capital abroad, including offshore. In this regard, as stated by Vitaly Chernov, the service plans to tighten control over suspicious transactions insurers. Intends to increase several times the number of inspections of insurance companies and the Chamber of the Russian Federation, promised its deputy director, Valery Goreglyad. Auditors check the joint venture in 2010 identified a set of schemes that are subject to collusion between insurers and policyholders to launch budgets and their diversion. Told Valery Goreglyad, some insurance companies are acquired on a bill the insurance contract, then the farmer claimed loss due to loss of crops. Thus the 'assimilated' budgets. Attention Accounting Chamber auditors have attracted a variety of facts. For example, more than 4.5 thousand of farms have entered 55% of contracts with three insurers. In addition, funds were allocated public subsidies on agricultural areas is very uneven and concentrated in certain regions. "Accounting Chamber was directed representation in the Ministry of Agriculture of the Russian Federation, where they were given the shortcomings and the need to change attitudes in the agricultural insurance with state support", - said Valeriy Goreglyad. By inspection of insurers to connect and the Federal Tax Service (FTS). Deputy Head of the estimated FTS Kirill Yankov, a number of insurers cooperate with bogus brokers, firms engaged in one-day and cashing. Some companies are moving away from tax, relating to insurance claims money that is not really a paying customer, since the insurance did not do so. "According to our records, the practice of cashing narrows among commercial banks, but it begins to expand in segments where there are other players in the financial market", - said Kirill Yankov. Greater control over insurers promise this year and Rosstrakhnadzor. Until the end of February to be adopted regulations to bankruptcy law, then in office will be able to prevent "ugly" withdrawal from the market of unscrupulous players. Recall that in 2010, FSIS withdrew the license of 101 companies. This year, apparently, this list will be much wider. Leaders of the insurance market by the end of 2010, the Company Region Award in 2010, mln. Award in 2009, mln. Growth rate,% Payments in 2010, mln. Payments in 2009, mln. Growth rate,% 74 305 sf Rosgosstrakh Lyubertsy - 38,189 sf - Sogaz Moscow 46939 38931 22 235 19 383 20.6 14.7 Ingosstrakh, Moscow 41167 44665 -7.8 28433 30759 -7.6 RESO-Guarantee Moscow 35 811 30 427 19 374 18 551 4.4 17.7 Military Insurance Company, Moscow 25147 19525 12 948 11 307 28.8 14.5 Rosno Moscow 20 587 19 831 17 385 10 564 3.8 64.6 Moscow Alfa Insurance 20463 19309 +6.0 10482 10927 -4.1 Consent Moscow 15798 9001 +75.5 6988 5728 22.0 Renaissance Insurance, Moscow 12 000 10 334 16.1 6516 -17.4 7884 Moscow Uralsib 10363 12282 -15.6 8885 10728 -17.2 Insurance Group MSK Moscow 10 020 sf - 7320 sf - Moscow ZHASO 9856 9536 7093 6724 3.4 5.5 MAX Moscow 9460 8209 5684 3474 15.2 63.6 Capital Insurance Kogalym 8668 8333 +4.0 3449 3479 -0.9 Spassky Gate, Moscow 8604 9068 - 5.1 6579 4924 +33.6 Yugoria Khanty-Mansiysk 7527 7316 +2.9 4525 4508 +0.4 Zurich, Moscow 6546 8543 -23.4 5635 7530 -25.2 Generali PPF Life Insurance Moscow 6300 5304 18.8 249 192 29.8 Rostra Moscow 5878 3511 2276 769 67.4 196.1 VTB Insurance Moscow 5543 3472 59.7 1677 10.7 1515 Guta insurance Moscow 5013 4294 16.8 2754 2522 9, 2 Energogarant Moscow 4915 5108 -3.8 1999 2049 -2.4 Transneft, Moscow 4445 3181 39.8 2215 73.2 1279 Progress-Garant Moscow 4323 3605 3133 3117 19.9 0.5 4268 3565 Alico Moscow + 1220 19.7 1547 -21.1 Surgutneftegaz Surgut 3759 3045 23.5 2979 35.5 2198 Rosgosstrakh-life Moscow 3421 2034 68.1 534 295 81.2 Rosgosstrakh Moscow 3121 4752 -34.3 3430 3023 + 13.5 Moscow Russia 3053 5118 -40.3 2977 3774 -21.1 Oranta insurance Moscow 3006 3259 -7.8 2638 3399 -22.4 Russian Insurance Centre Moscow 2965 3404 -12.9 688 1412 -51.3 AlfaStrakhovanie- Life Moscow 2911 957 204.3 97 94 3.1 First Insurance Company, Moscow 2653 2476 +7.2 1758 1896 -7.3 Aviv, Moscow 2567 1113 130.7 15.7 406 351 2561 1508 Socium Moscow 69 9 37 38 -2.2 Innogarant Moscow 2559 2666 -4.0 1381 1033 +33.7 Megaruss Moscow-D 2402 2194 +9.5 1033 1129 -8.4 National Insurance Group Dolgoprudny 2234 2549 -12.3 1004 1177 -14.6 Russian Standard Insurance, Moscow 2117 75 67 1026 106.3 11.7 The National Insurance Moscow 2041 1670 22.2 882 810 8.9 Nasco Tatarstan Kazan 1966 1650 19.2 1545 1198 +29, 0 Chartis Moscow 1934 1631 18.6 400 517 -22.5 Respect-Polis Khimki 1932 1888 2.3 341 190 79.5 Ergo Russia St Petersburg 1913 1986 1235 1215 -3.7 1.6 Sogaz- Life Moscow 1863 1358 3328 327 37.2 917.7 Generali PPF general insurance Moscow 1811 sf - 2 sf - Life insurance Sozhekap Moscow 1784 627 184.5 26 20 27.7 RSTK Khimki 1737 1002 73.3 401 276 45.3 Alliance Moscow 1534 1437 6.8 0.8 621 616 1483 Moscow Siv Life 1021 45.2 66 63 4.3 Source: FSIS, the calculations "F.»