KPMG presents the eighth annual survey of the Russian insurance market
The eighth survey of the Russian insurance market
Key directions and trends in 2017.
The respondents say that the life insurance segment demonstrating a 66% record growth in 2016 will continue to grow rapidly (about 30%) for another 2–3 years taking leading positions in the near future. At present, the growth of the life insurance market is achieved through an active distribution of investment life insurance products, which are used by many insurers as an alternative to deposits. However, according to the survey, some market players have scheduled a reduction in the sale of investment and endowment life insurance for 2017.
As for the non-life insurance market, the management of insurance companies in recent years has focused on auto insurance. According to respondents, in 2017 the OSAGO loss ratio will reach its maximum level for the last five years. And even non-monetary compensation introduced to lower the OSAGO loss ratio will have an adverse effect and, according to comments by the top management, may add 7.5% to the loss ratio coefficient. In light of growing OSAGO loss ratio, the insurance market players consider to drop this particular type of license: the management of insurance companies taking part in the survey believe that another two large companies will exit the market in 2017.
On the contrary, the CASCO market is showing very positive trends. Due to measures taken in the previous periods to reduce the loss ratio and cut costs, the profitability of voluntary car insurance has grown significantly. According to respondents, these trends may improve the competition in the CASCO market, which, in its turn, will lead to the reduction of insurance rates and influence the acquisition costs.
The management of insurance companies continue their search for a profitable business growth: 90% of insurers participating in the survey believe that this growth will become possible through non-price factors, for example new technologies. The management of insurance companies highlight the potential opportunities for effective application of new technologies in all areas of business process – sales, underwriting and loss settlement.
The full version of the survey is available here (only in Russian).
© 2021 KPMG. KPMG refers to JSC “KPMG”, “KPMG Tax and Advisory” LLC, companies incorporated under the laws of the Russian Federation, and KPMG Limited, a company incorporated under the Companies (Guernsey) Law, 2008, member firms of the KPMG global organization of independent member firms. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.