KMG presents the twelfth annual survey of the Russian insurance market. As always, in our review we talk about how executives of insurance companies see the development of the market in the near future.

In 2020, insurance premiums rose by 3.9%, contrary to the last year’s expectations of the majority of respondents (the market was expected to fall by 4% on average). After a 14% decline in the Q2 the market demonstrated potential for further growth and capacity to a rapid recovery after the weakening of the most stringent restrictive measures against COVID-19. Growth in Q3 and Q4 2020 reached 9.3% and 6.7%, respectively.

According to respondents’ opinion, the most promising areas of non-life insurance are modifications of Casco products (insurance “by subscription”, reduced set of risks for used cars and others) and retail voluntary medical insurance. The individual property insurance market also has growth potential due to development of new products (smart home, insurance «by subscription»).

As for the life insurance market, in order to balance the reduced sales of life investment contracts after the strengthening of regulatory restrictions, players focused on the development of endowment life insurance products. On the other hand, the current regulator’s initiative1 aimed at ensuring potential combination of the licenses of management companies and life insurers, creates prospects for the development of unit-linked insurance as a successor to the life investment insurance, which is supported by the initiatives of the insurance community and the Russian Union of Insurers to develop this type of product.

Insurers continue to optimize their business processes by integrating new technologies into various areas of activity. The coronavirus pandemic has become a serious incentive for optimization of processes and development of online communication channels with clients.

Executives of insurance companies believe that the sector as a whole could benefit from the following changes: reducing regulatory burdens and legislative restrictions for online processes, as well as creating tax incentives for policyholders.

The full version of the survey is available via the link below.