Non-Life Insurance in Russia, Key Trends and Opportunities to 2018

Date: 2015-09

Russia has the second largest non-life insurance segment, after China, in the BRIC countries (Brazil, Russia, India and China) in terms of gross written premium. However, the segment is relatively underpenetrated; non-life insurance penetration in Russia was just 0.88% in 2013, while it was 3.10% in the UK, 2.05% in Germany and 1.17% in Brazil. This indicates positive growth potential, especially in categories such as motor hull and residential insurance. Following regulatory changes, the segment underwent a period of consolidation as larger insurers acquired smaller ones, while some exited the segment altogether. Over the forecast period (2013โˆ’2018), the growth of the non-life segment will be driven by Russiaโ€™s growing automobile and construction sectors, the introduction of new mandatory insurance classes, and an increase in foreign direct investment (FDI) limits. The gross written premium of the non-life segment rose at a review-period (2009โˆ’2013) compound annual growth rate (CAGR) of 11.0%. The value is projected to increase at a projected forecast-period CAGR of 19.7%. This growth will be mainly driven by strong economic conditions, the introduction of mandatory non-life insurance, and an increase in the FDI cap from 25% to 50%.

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