New Financial Services research report from Business Monitor International is now available from Fast Market Research
PR-Inside.com: 2014-03-30 03:29:47
The growth of Russia's insurance sector has slowed dramatically. Life insurance is developing from a low base, but is growing at single-digit rates. Thanks partly to pressure from the regulator, much needed consolidation of the industry is underway. All this is in the context of an insurance sector where several of the largest players - and in particular market leader Rosgosstrakh (RGS) - clearly have scale by any standard. However, it is the weaknesses of, and threats to, the sector that continue to dominate. Growth is overly dependent on compulsory lines. Neither the regulators nor the local insurance companies have made much progress in addressing the main challenge that must be overcome by the life segment: the lack of trust on the part of individuals and households.
Full Report Details at
BMI's new insurance report format provides forecasts of the life and non-life markets, including gross and net premiums, reinsurance premiums and assets. Moreover, it provides forecasts for key growth drivers such as vehicle fleet size, demographic factors and private health expenditure. The report also contains a comprehensive breakdown of the non-life insurance market, providing forecasts for motor and transport insurance, property, personal accident, health, general liability and credit insurance. Finally, the new report offers a detailed breakdown of the life and non-life competitive landscapes, covering the top companies present in each segment by premiums and market share.
There was a time when Russia's insurance sector was both large and rapidly growing. Sadly, that time is past. Even the tiny life segment is now rising at single digit rates. The regulator has imposed new - and more stringent - capital requirements, which has contributed to the ongoing rationalisation of the insurance sector.
As of early 2014, it remains easy to identify weaknesses in the Russian insurance sector. Thus far, much of the development of the industry has depended on the growth of compulsory lines. Compulsory Medical Expenses Insurance (CMEI) is by far the largest line and represents about half of all premiums written across the entire sector.
Financial literacy among households is low. Most fundamentally, Russian households do not have sufficient trust to engage in long-term contractual relationships with the life companies. Although foreign insurers have a significant presence (particularly in the life segment), they already account for 25% of the aggregate capital - the legal limit - within the segment. Many insurers face downwards pressure on prices and margins - whether from competitors or distributors. The move by savings bank giant Sberbank to become the leading player in bancassurance in Russia is a positive wildcard, but provides no guarantee that life insurance will move beyond an embryonic level of development within the forecast period.
Key BMI Forecasts:
* In 2014, total premiums should rise by just 0.7% to US$48.8bn.
* Life premiums will grow by 8.7% to US$1.8bn.
* Non-life premiums will rise by 0.4% to US$47.0bn.
* Within this sub-total, motor vehicle insurance premiums should grow by 5.2% to US$4.4bn.
* Health insurance (i.e. overwhelmingly Compulsory Medical Expenses Insurance) premiums will fall by 0.9% to US$24.3bn.
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
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