Basic research. Basic Research Getting Ready for a Reboot

St. Petersburg State University of Economics. - 2016. - S. 716.

12. Smirnov N.N. Macroeconomics. Part 2: Tutorial. - St. Petersburg: ITMO University, 2016. - 121 p.

13. Tkachenko A. A. Simon Kuznets on demographic problems / A. A. Tkachenko // Demographic Review. - 2016. - Volume 3. - No. 1. - S. 71-93.

14. Yanchenko E.V. Labor market: analysis of regional differentiation / E.V. Yanchenko // Regional economy: theory and practice. - 2015. - No. 36. - S. 56-66.

Kozlova Elena Ivanovna, Cand.Econ.Sci., associate professor Lipetsk state technical university, Lipetsk, Russia Novak Maxim Andreevich, Cand.Econ.Sci., associate professor Lipetsk state technical university, Lipetsk, Russia

THE REVIEW OF METHODS OF IDENTIFYING THE RELATIONSHIP OF THE DYNAMICS OF EMPLOYMENT AND GROSS REGIONAL PRODUCT

abstract. The article reviews approaches to the definition of macroeconomic regularities at the regional level. The starting point of the study is the view of the human factor as the most important productive force, one of the conditions for economic growth. Therefore, as the main link to identify such patterns chosen population size and level of employment. Keywords: economic growth, statistical interrelation of indicators, gross regional product, demographic changes, population, employed population.

ANALYSIS OF THE INSURANCE MARKET OF RUSSIA Kokhno Natalia Olegovna, Ph.D. tech., sciences (e-mail: Natalya.1 [email protected]) Oberemko Ekaterina Vladimirovna, student (e-mail: [email protected]) Lopatina Anastasia Alekseevna, student (e-mail: [email protected]) Novocherkassk Engineering and Land Reclamation Institute. A.K. Kortunova Donskoy State Agrarian University, Russia, Novocherkassk

This article analyzes the Russian insurance market. The volumes of payments, bonuses for the 1st quarter of 2018 and 2017 were determined.

Key words: insurance market, life insurance, number of participants, OSAGO, insurers, premium volume, payout volume.

The insurance market is a special socio-economic environment, a certain area of ​​economic relations, where the object of sale and purchase is insurance protection, demand and supply for it are formed. It includes life insurance, accident and illness insurance, voluntary medical insurance, motor hull insurance, OSAGO, insurance of other property of legal entities, property insurance of citizens. Like the market and any other goods, works and services, the insurance market is prone to cyclicality, lower prices for insurance services and economic natural fluctuations in growth.

The modern Russian insurance market is characterized by increased competition, a limited offer of a range of insurance products, a high territorial concentration of leading insurance companies in central regions with a developed branch network, tightly managed by parent organizations, often without taking into account the specifics of the corresponding regional segment of the insurance market.

To establish the state of the insurance market in Russia, we will now analyze its segments quarterly.

According to the results of the analysis, the 1st quarter of 2018 was the most successful for insurers over the past 5 years. Compared to the previous year, the volume of premiums by type of insurance increased by 19.3% and amounted to 377.4 billion rubles.

The volume of payments decreased by 11.7% to 109.1 billion rubles, of which 4.65 billion rubles were paid by court order. The amount of payments includes non-identified write-offs for collection, so the total amount is greater than the amount of payments for individual types.

After stagnation in 2017, premiums for voluntary types showed high positive dynamics: the volume of premiums increased by 24.6 billion rubles due to almost all types, except for insurance of land, air and water transport, agricultural insurance and liability insurance. The share of life insurance compared to

2017 increased by 5.5%, the share of auto insurance decreased by 4.9%, VMI-2.5%.

The increase in accident insurance premiums for the 1st quarter of 2018 amounted to 28.8%, or 7 billion rubles. The number of contracts increased by 199 thousand to 11.48 million. The average premium increased from 2,175 rubles. in the same period last year to 2,752 rubles, which is associated with an increase in the share of contracts with legal entities in the 1st quarter.

The number of market participants has stabilized. According to the Central Bank of the Russian Federation, as of March 31, 2018, 223 insurance and reinsurance companies, as well as 11 mutual insurance companies, were registered in the register of insurance business entities, of which only 162 collected more than 10 million rubles in the 1st quarter

2018. During the first 3 months of 2018, licenses were revoked from 4 companies, including 1 due to voluntary refusal from insurance activities

The 1st quarter of 2018 was the best for the corporate property insurance segment over the past 2 years: the volume of premiums increased by 33% to 34.28 billion rubles. Almost all companies from the top twenty in this category showed a positive trend in premiums.

The volume of property insurance of citizens increased by 16.85% to 13.4 billion rubles. The decrease in premiums compared to the 4th quarter is typical for this type. The composition of the TOP-3 does not change, but the share of the segment leader PJSC Rosgosstrakh continues to decrease (from 29.8% in the 1st quarter of 2017 to 23.8%). OOO IC VTB Insurance and OOO Sberbank Insurance co-

maintained a positive trend. The number of insurance contracts increased by 1.95 million, including CJSC VSK - by 818 thousand, LLC IC Sberbank Insurance - by 650 thousand, SPAO Ingosstrakh - by 251 thousand.

Let us trace the dynamics of changes in insurance premiums and property insurance payments from the 1st quarter of 2016 to the 1st quarter of 2018. (Picture 1)

18,000 16,000 14,000 »2! 12 000

X 8,000 1 6,000 4,000 2,000 0

premiums, million rubles

payments, million rubles

Figure 1 - Dynamics of insurance premiums and insurance payments

property 2016-2018

Life insurance remains the main market driver with a premium growth rate of over 54%. However, the number of concluded contracts is reduced by 103,428 compared to the 1st quarter of last year due to a 25% decrease in the number of insured borrowers.

The volume of life insurance payments increased to 10.7 billion rubles due to the expiration of life insurance contracts concluded. (Table 1)

Table 1 - Key indicators for life insurance, 2016-2018

Years Prizes, million rubles Payments, million rubles Number of contracts

Q1 2016 41,423.70 6,654.84 1,193,232

Q2 2016 47,422.07 6,442.72 968,768

Q3 2016 58,660.78 8,482.88 1,018,719

Q4 2016 68,233.61 8,402.38 1,641,761

Q1 2017 59,830.62 7,788.90 987,727

Q2 2017 81,400.17 9,336.70 1,114,948

Q3 2017 89,651.59 9,071.14 1,157,271

Q4 2017 100,654.62 10,290.10 1,277,226

Q1 2018 92,220.75 10,676.08 884,299

Analyzing the Russian insurance market, let's see how the volume of premiums for insurance of land transport means changes. The volume of premiums remained at the level of the 1st quarter of last year (36.7 billion rubles), and the number of contracts increased by almost 154,000. The growth in the number of contracts was driven by sales of new cars (by 70.5 thousand more than in Q1 2017) and an increase in demand for cheaper products with franchises.

The average market payout ratio for ground transportation decreased (52.4% in Q1 2018 vs. 57.35% a year earlier). Both the number of claimed losses (by 17 thousand) and the number of refusals 8,248 (in the 1st quarter of 2018 against 13,236 in the 1st quarter of 2017) decreased, and the average payment increased by almost 7 thousand rubles. This is due to the wide distribution of products with the participation of policyholders in losses.

The number of insurers involved in this type of insurance decreased from 111 to 102 over the quarter, but only 69 companies concluded more than 100 contracts. A quarter of motor hull insurers have a payout ratio of more than 100%, but for almost all of them the share of motor hull in the portfolio does not exceed 5%. For other insurers, this market segment remains quite profitable.

Table 2 - TOP-10 regions in terms of OSAGO payments

Volume of premiums, thousand rubles Amount of payments, thousand rubles Payout ratio, %

Republic of Dagestan 176,827,316,348 178.90%

Karachay-Cherkess Republic - 35,759 61,030 170.67%

Republic of Tyva 13,825 22,175 160.39%

Republic of North Ossetia-Alania 69,619 107,654 154.63%

Republic of Adygea (Adygea) 49,603 75,679 152.57%

Primorsky Krai 329,761,457,526 138.74%

Ivanovo region 197,967 264,919 133.82%

Republic of Ingushetia 20,622 23,819 115.50%

Republic of Buryatia 127,864 146,798 114.81%

Magadan Region 24,100 26,781 111.12%

Analyzing OSAGO insurance, we can say that the volume of premiums decreased by 46 billion rubles simultaneously with a decrease in the number of contracts (minus 101.5 thousand compared to the 1st quarter of 2017). Some car owners generally refused to conclude an agreement, some purchased a fake policy.

The volume of payments decreased by almost 20 billion rubles compared to the 1st quarter of last year (32.4 billion rubles), and the payout ratio - up to 70.5%. However, if in 2017, 16 insurers had a payout ratio of more than 77%, then by the end of the 1st quarter there were already 19 such companies. In 10 of them, the share of OSAGO in the portfolio exceeds 30%, which poses a threat to financial stability. 2 of these 10 companies left the market in the 2nd quarter of 2018. (Table 2).

According to the results of the first quarter of 2018, the average payment under OSAGO amounted to 61.1 thousand rubles. The number of regions with a payout ratio of more than 77% has reached 42, in 17 of them payouts exceed premiums.

Consider the factors that affect life insurance and other types of insurance. (Figure 2.3)

Investment attractiveness of insurance products

Activity of the main players Lending volumes Purchasing power of the population Legislative reforms of the insurance market

2018 ■ 2017

Figure 2 - Factors affecting the life insurance market

in 2017-2018

From the data presented in Table 2, it can be seen that life insurance is the investment attractiveness of insurance products, which in 2017 amounted to 60%, and in 2018 it increased by 33% and amounted to 93%, the activity of the main players also has a significant impact, which in 2017 amounted to 80 %, and in 2018, decreased by 16% and therefore amounted to 64%, lending volumes amounted to 50% in both 2017 and 2018. The most insignificant factors affecting life insurance is the purchasing power of the population, which in 2017 amounted to 30%, and in 2018 it decreased by only 1% and therefore amounted to 29% and the legislative reforms of the insurance market in 2017 amounted to 10%, and in 2018 decreased by 3% and amounted to 7%.

Lending volume

Purchasing power of the population

Legislative reforms of the insurance market

economic sanctions

Ruble exchange rate volatility

2018 ■ 2017

Figure 3 - Factors affecting the non-life insurance market in 2017 and 2018

Examining Figure 3, we can say that the volume of lending affects the market more than anyone else in 2017, it amounted to 80%, and in 2018 it decreased by 1% and amounted to 79%; the purchasing power of the population in 2017 was 70%, and in 2018 it decreased by 6% and amounted to 64%. Legislative reforms of the insurance market have less influence; in 2017 they amounted to 10%, and in 2018 they increased by 40% and amounted to 50%; economic sanctions in 2017 amounted to 10%, and in 2018 slightly increased by 4% and amounted to 14%; the volatility of the ruble exchange rate in 2017 was 60%, and in 2018 it decreased by 46% and amounted to 14%.

Based on the results of the 1st quarter of 2018, we can expect active promotion of investment life insurance through credit institutions, which will be facilitated by low deposit rates. Life insurance premiums are expected at the level of 40-45%. The volume of the life insurance market will reach 470 billion rubles. Insurance against accidents and illnesses (growth rates - 14-16% for 2018), VHI (4-6%) and insurance of property of citizens (9-11%). These segments will be supported by the spread of critical illness insurance programs, boxed products, as well as inflation in the cost of medical services. In the field of OSAGO regulation, no significant changes are expected until the end of the year. In motor hull insurance, for the first time in several years, a slight positive dynamics of premiums will be observed - the growth rate will be 1-3% in 2018 compared to 2017. In corporate property insurance, the market is expected to recover by 2-4% after the fall in 2017.

Bibliography

1. Ulybina L.K., Okorokova O.A., Vanyan G.A. Russian insurance market: assessment of indicators and development prospects - M.: Economics and Entrepreneurship, 2013. No. 85. pp. 469-479.

2. Insurance market 2018 [Electronic resource]. Access mode: blp://sepler-yf.ru/data/economy/strahovoy-rynok-2018.php. Retrieved October 25, 2018

3. Overview of the insurance market for the 1st quarter of 2018 NRA [Electronic resource]. Access mode: http://www.ra-national.ru/ru/node/62866. Retrieved October 25, 2018

4. Bank of the Russian Federation [Electronic resource]. Access mode: http://www.cbr.ru/. Retrieved October 25, 2018

Kohno Natalia Olegovna, cand. tech., sciences" (e-mail: [email protected])

Oberemko Ekaterina Vladimirovna, student faculty Bist (e-mail: [email protected]) Lopatina Anastasia Alekseevna, student faculty Bist (e-mail: [email protected])

Novocherkassk Engineering Reclamation Institute. A. K. Kortunov

Donskoy GAU, Russia, Novocherkassk

ANALYSIS OF THE INSURANCE MARKET OF RUSSIA

abstract. This article analyzes the insurance market in Russia. To determine the level of benefits, premiums for the 1st quarter of 2018 and 2017.

Keywords: insurance market, life insurance, number of participants, CTP, insurers, the volume of premiums, the volume of payments

ESSENCE, TYPES AND FEATURES OF PROFESSIONAL LIABILITY INSURANCE IN THE RUSSIAN FEDERATION Kosheleva Darya Sergeevna, student (e-mail: [email protected]) Suslyakova Oksana Nikolaevna, Candidate of Economics, Associate Professor

Financial University under the Government of the Russian Federation,

Kaluga branch, Kaluga (e-mail: [email protected])

This article is aimed at studying professional liability insurance in the Russian Federation and the development prospects of this sub-sector of liability insurance. The authors analyzed the market for this type of insurance services, analyzed a number of existing problems and identified ways to overcome them.

Key words: professional liability, professional liability insurance, prospects for the development of professional liability, world experience.

In modern market conditions, each business entity cannot guarantee that in the course of its professional activities there will not be any circumstances affecting not only the interests of other participants, but also causing certain damage. Thus, the risk of harm to the health, life or property of third parties cannot be excluded due to the fact that each person is not “insured” from mistakes. In addition, more professional mistakes can make even

• LIFE INSURANCE
• OSAGO
• LIABILITY INSURANCE
• INSURANCE MARKET

This article presents the definition, indicators and structure of the insurance market in Russia. The analysis of the main types of insurance based on the results of 2016 was carried out. The TOP-10 most reliable insurance companies for life insurance, liability and OSAGO have been identified.

• The current stage of development of the international financial market
• Features of travel insurance in the Russian Federation

The insurance market is a sphere of monetary relations, where the object of purchase and sale is an insurance service, and supply and demand for it are formed. The insurance market is a very complex integrated system. Where the structure of this system is formed from insurance companies, policyholders, insurance products, insurance intermediaries, professional appraisers and the system of state regulation of the insurance market.

According to the Bank of Russia, the volume of the insurance market in 2016 reached 1,181 billion rubles, the growth rate of premiums amounted to 15.3%. At the same time, excluding the life insurance segment, premium growth rates amounted to only 7.9% in 2016 compared to 2015, falling 0.7 percentage points short of the 2013 level. Quarterly growth rates of insurance premiums have been growing for three consecutive quarters since the beginning of 2016 and showed a downward trend in the fourth quarter. The positive quarterly dynamics of insurance premiums was due to the active promotion of investment life insurance products, the residual effect of the increase in OSAGO rates, the recovery in the accident and health insurance segment, and the recovery of the corporate insurance market after a fall a year earlier. The slowdown in quarterly growth rates of premiums to 16% (up to 5.9% excluding life insurance) in the last quarter of 2016 is explained by the negative dynamics of quarterly premiums for OSAGO, as well as a slowdown in the growth rates of premiums for accident and health insurance and VHI after the peak of growth in the third quarter.

In the growing market, the leader of the fall was motor hull insurance, which lost 16.6 billion rubles in 2016. As a result of a two-year drop in auto hull insurance premiums for 2015-2016, a total of 50 billion rubles of premium was missing, which led to changes in the segmentation of the insurance market. After giving way to the second place among the largest types of life insurance, auto hull now occupies the third line. In addition, compulsory liability insurance of the owner of a hazardous facility for damage caused by an accident at a hazardous facility suffered significant losses over the previous year: it decreased by 2.7 billion in premiums, or by 46.3% in relative terms, due to a decrease in tariffs, which came into force on September 1, 2015. In absolute terms, the insurance market in 2016 grew by 157 billion rubles, almost 55% of which was provided by the life insurance segment (+86 billion rubles). The largest contribution to the increase in premiums was also made by insurance against accidents and illnesses (+27.1 billion rubles), OSAGO (+15.7 billion rubles), VMI (+8.9 billion rubles), insurance of other property of citizens and legal entities ( 7.5 billion rubles each) and insurance of financial risks (+6.8 billion rubles) . Let's present the most reliable insurance companies in Russia for OSAGO in 2016 in Table 1.

Table 1. TOP-10 most reliable insurance companies in Russia in terms of OSAGO in 2016

One of the main drivers of the insurance market in 2016 was the life insurance segment. The number of insurance premiums collected in this segment increased by 67% compared to 2015. The main driver of the entire life insurance market in 2016 was the segment of investment life insurance, which showed a two-fold growth . Such a high level of demand for this type of insurance is explained by a decrease in rates on bank deposits, while the demand for savings from citizens continues to grow (Table 2).

Table 2. TOP 10 most reliable life insurance companies in Russia in 2016

The main market share in this segment is still occupied by IC Sberbank Life Insurance, which increased the volume of insurance premiums by 41%. Despite this, the share of Sberbank in the segment decreased due to the growth of other participants - SivLife, Ingosstrakh Life, Raiffeisen Life, SOGAZ Life, PPF Life Insurance. The most significant growth was shown by Ingosstrakh Life, showing an eightfold increase in the number of collected premiums.

Classical life insurance, which is more focused on providing financial protection for health problems, also showed steady growth. This segment continues to develop evenly - people need additional financial support in case of illness and injury, and among all the tools, only a policy can guarantee this. In accordance with the company's development strategy, classic life insurance programs should be offered to customers through an agent network. Only individual work with a financial consultant allows you to choose a personal solution for everyone and provide high-quality service. Clients of the company both in a year and in 5 years can contact their consultant directly and ask a question about insurance.

Among the growing segments of the insurance market, one can also single out civil liability insurance and financial risk insurance. In 2016, the liability insurance market showed a 30% increase in insurance premiums compared to 2015, as well as an almost mirror-like increase in the number of signed contracts (25%). A similar trend continues in the financial risk insurance segment: according to preliminary estimates, the volume of collected insurance premiums increased by more than 45% compared to the same period in 2015.

The growth of the civil liability insurance segment is accompanied by the entry of a considerable number of new and large players into it. At the same time, among companies with the highest reliability rating, on average, the increase in premiums was small. With the exception of Sberbank Insurance, which carried out “active expansion” in the segment and in 2016 increased the volume of insurance premiums by 262% compared to the same period last year (Table 3).

Table 3. TOP-10 most reliable insurance companies in Russia in terms of liability insurance in 2016

According to experts, insurers will face a number of technological and other challenges next year. In addition to organizing OSAGO electronic sales throughout the country, they will have to submit reports according to the new chart of accounts, the content and deadlines for reporting on a whole list of other basic documents have also been updated, including the structure and procedure for placing insurance reserves, the insurance company's own funds. Restrictions have been introduced for the placement of life insurers' assets. The regulator plans next year to focus on studying the business plans of insurers and compiling company profiles. Now strong distortions, too heavy shares of unprofitable types of insurance in portfolios will raise questions from the regulator.

Companies will also have to draw up mandatory actuarial opinions that shed light on the adequacy of the tariffs applied by the insurer for a particular type of insurance, on the completeness of reserves. Strengthening requirements for asset quality and their verification will continue in 2017, the Bank of Russia promises.

The regulator plans to soon return to discussing the topic of "entry ticket" to the insurance market, potential investors will be asked questions not only about the origin of capital invested in insurance companies, but also questions about the future business strategy of the company.

The Central Bank is concerned that in 2016 the main problem of the insurance market was not resolved - relations with customers in the retail segment did not improve dramatically. In general, this interaction did not leave the depressed zone in 2016: two-thirds of all complaints against participants in the entire financial market in the Russian Federation still came from insurers, including the vast majority of complaints related to conflicts in the field of OSAGO.

Thus, 2016 did not bring any major changes to the market and continued the dynamics that emerged in 2015 - motor insurance types are gradually moving to slow development, voluntary life insurance continued to grow, being at the peak of its own potential by the end of the year, taking into account the current conditions, more the segments of civil liability insurance and financial risk insurance began to grow intensively.

Bibliography

1. Aksyutina S.V. Insurance market of the Russian Federation: problems and prospects // Problems of territory development. - 2014. No. 2 (70) - P.115-126.
2. Appanova Yu.E., Kostin M.D., Udalov A.A. Approaches to determining the specific characteristics of contractual relations in modern institutional economics//website. -2016. No. 44-4. pp. 174-177
3. Denisova N.I., Chizhenko L.M., Chizhenko I.P. Insurance market in Russia: problems and development prospects // Bulletin of the Moscow University named after S.Yu. Witte. Series 1: Economics and Management. - 2016. No. 1 (16) - P. 51-57.
4. Ibragimov R.D., Nafikov D.T., Sharifyanova Z.F. Risk management of insurance companies: current state and prospects // Innovative science. - 2016. No. 2-1 (14) - P. 136-138.
5. Nasakina L.A., Udalov A.A. The concept of entrepreneurial risk // Breakthrough economic reforms under risk and uncertainty: Sat. articles of the international scientific-practical conference. - 2014. - S. 137-140.
6. Overview of the insurance market in Russia [Electronic resource]. – Access mode: http://www.marketing.spb.ru/mr/services/insurance_survey.htm
7. Reshetnikova A.A. Basic requirements for the institutionalization of the insurance market. Innovatsionnaya nauka. - 2016. No. 3-1 (15) - P. 192-194.
8. State and development prospects of the Russian insurance market [Electronic resource]. – Access mode: http://diplomba.ru/work/74414
9. Insurance market, concept and structure [Electronic resource]. – Access mode: http://www.scienceforum.ru/2016/1054/9638
10. Tolkacheva S.E., Udalov A.A., Nesmeyanova N.A. 2016. No. 45-2. pp. 217-221
11. Sharifyanova Z.F., Saetova E.R. Influence of sanctions on the insurance market of Russia // Innovative science. - 2016. No. 2-2 (14) - P. 88-90.

According to the baseline forecast of RAEX (Expert RA), in 2016 the nominal volume of the Russian insurance market will grow by no more than 2-5%, which means that the market will fall without inflation. Falling premiums for motor hull insurance and corporate property insurance will increase the risks of dumping. The slowdown in OSAGO and life insurance will lead to an increase in unprofitability and a reduction in the profitability of own funds. At the same time, the threat of an outflow of investments from the industry will weaken the financial stability of the insurance market. According to RAEX (Expert RA), negative rating actions will prevail in 2016.

According to the basic forecast of RAEX (Expert RA), the growth rate of insurance premiums will be 2-5%, the market volume will not exceed 1,070 billion rubles. The baseline forecast assumes a relatively moderate crisis in the banking market, maintaining sanctions against Russia at the current level, and a slight reduction in GDP. According to the negative forecast of RAEX (Expert RA), the volume of the insurance market in 2016 will decrease by 1-4%. The negative scenario is realized with the deepening of the crisis in the banking market, the expansion of sanctions against Russia, and a noticeable reduction in GDP. Forecasts are given in nominal terms without inflation.

The reduction of premiums in the auto hull and property insurance segments of legal entities will increase the risks of dumping in the market. The volume of the motor hull insurance market in 2016 will decrease by 9-12% according to the basic forecast, by 15-18% according to the negative forecast. The fall in premiums will be associated with a decrease in car sales and the refusal of some car owners to purchase an insurance policy at an increased price. At the same time, the effect of the increase in tariffs will not be able to cover the effect of the reduction in demand. The property insurance market for legal entities will decline by 5-8% according to the basic forecast, by 9-12% - according to the negative one. Under such conditions, the likelihood of dumping in the market increases. As a result, underreserving will increase, the financial stability of individual insurers will decrease, which will put negative pressure on the ratings.

A slowdown in the growth of premiums against the backdrop of an increase in payments for OSAGO and life insurance will lead to a deterioration in the financial results of insurers. According to the basic forecast of RAEX (Expert RA), the growth rate of life insurance in 2016 will be 9-12%, for OSAGO - 14-17%. According to the negative forecast, the values ​​of the indicators will be 2-5% and 10-13%, respectively. A sharp slowdown in the growth rate of OSAGO premiums (+41% in 2015) will occur due to the exhaustion of the effect of tariff increases (already from the 2nd quarter of 2016). The low growth rate of life insurance premiums will be associated with a reduction in lending to the population and a gradual saturation of demand in the segment of investment and accumulative life insurance. At the same time, in 2016, both segments are expected to accelerate the growth of payments - in OSAGO due to an increase in payments under new limits, in life insurance due to the maturation of payments under medium-term life insurance contracts. Thus, insurers specializing in OSAGO and life insurance will face an increase in losses and a reduction in the profitability of their own funds, which will have a negative impact on the ratings of insurance companies. A positive impact on financial stability and, accordingly, positive pressure on the reliability ratings of insurers will be the growth of the segment of property insurance of individuals through the promotion of packaged products and the development of insurance against natural disasters.

A possible outflow of investments from the industry due to the predicted decline in the average market return on equity of its participants will weaken the financial stability of the market. According to the baseline forecast of RAEX (Expert RA), in 2016, as a result of the stagnation of the insurance market, the gradual exhaustion of the effect of the increase in OSAGO tariffs and the decrease in bank deposit rates, the return on equity of Russian insurers will return to the level of 6-7%. The negative forecast of RAEX (Expert RA) suggests a reduction in the return on equity of Russian insurers to the level of 4-5%. The share of expenses for doing business with Russian insurers will remain at the level of 2015 with the baseline forecast (43%), with a negative forecast, it will rise again to 44-45% (due to the lack of growth in premiums). The average combined loss ratio-net (excluding legal costs) will be 100-101% with a base forecast, 103-104% with a negative forecast. According to RAEX (Expert RA), negative rating actions will prevail in 2016.

According to the basic forecast of RAEX (Expert RA), the growth rate of insurance premiums will be 2-5%, the market volume will not exceed 1,070 billion rubles. The baseline forecast assumes a relatively moderate crisis in the banking market, maintaining sanctions against Russia at the current level, and a slight reduction in GDP. According to the negative forecast of RAEX (Expert RA), the volume of the insurance market in 2016 will decrease by 1-4%. The negative scenario is realized with the deepening of the crisis in the banking market, the expansion of sanctions against Russia, and a noticeable reduction in GDP. Forecasts are given in nominal terms without inflation.

Table 1. Forecasts by types of insurance for 2016

Despite the long stagnation (or decline), the insurance market in Russia is beginning to gain strength and show significant growth (with the exception of some segments). What type of insurance occupies a leading position in the Russian market? How many active insurers are there in Russia in 2018? What problems and prospects does Russian insurance have? The answers to these questions, as well as key indicators of the insurance market over the past 4 years, are presented in this article.

How many insurers are there in Russia?

During the period under review, from 2014 to 2017, there has been an active decline in players in the insurance market. Thus, in 2014, 404 insurance and reinsurance companies were registered (16 less than in 2013). And already in 2015, this number decreased by exactly 70 organizations, and 12 of them were in the TOP-100. 2016 showed approximately the same results, 73 companies left the market, 13 of which were also in the TOP-100. The largest departing organizations were "MSK", "Independence" and "Investments and Finance".

Thus, by the beginning of 2017, 256 organizations were operating in the insurance market. Of these, by the beginning of 2018, 226 insurers remained on the insurance market (not including brokers), and 21 companies voluntarily relinquished their licenses. Table 1 reflects data characterizing the number of insurers as of May 2018. It should be noted that in the period from January to the end of April 2018, 26 organizations were able to obtain a license, including 22 insurance companies and 4 brokers.

Table 1 - Number of subjects of insurance business in Russia in 2018

Source: Register of subjects of insurance business of the Central Bank of the Russian Federation as of May 4, 2018

The main reasons for the revocation of the license from insurance entities was the failure to comply with the requirements of the regulator, which since September 2013 has been the Bank of Russia. At the same time, some companies left the market by joining (merging) with a larger insurer. So, in particular, in 2016, MSK was merged with VTB Insurance, in 2017, the ZHASO insurance company became part of SOGAZ. In principle, the trend of such mergers and acquisitions is quite obvious, especially against the background of the merger of the insurance assets of the Renaissance Insurance and Welfare groups, as well as the transition of Rosgosstrakh under the control of FC Otkritie.

The situation on the market is also aggravated by the fact that small insurers become uncompetitive in the current conditions. This is due precisely to mergers and acquisitions, as well as an increase in the authorized capital and large volumes of insurance premiums. In 2017, the total authorized capital amounted to 206.6 billion rubles, which is 10 billion less than in 2016. At the same time, the average size of the authorized capital increased by 8.5% (from 842 to 914 million rubles). If a decision is subsequently made to establish a minimum capital threshold of 300 million rubles, then most small insurers will have to abandon their activities.

Key Development Indicators

Over the past few years, the Central Federal District has traditionally been the leader in the structure of total insurance premiums. In 2014 - 57.44%, in 2015 - 57.67%, in 2016 - 58.56%, in 2017 - 59.24%. Over the 4 years under review, some districts showed tremendous growth, including the volume of premiums in the Central Federal District increased by almost 200 billion rubles, while the rest approached the end of 2017 with an average increase of 20 billion. A special place can be given to the North Caucasian Federal District, in which the volume of premiums not only did not increase, but decreased by 1.5 billion rubles compared to 2016. Table 2 shows the distribution of premiums by federal districts.

Table 2 - The volume of insurance premiums in the period 2014-2017

Source: CBR data

If we consider the statistics of the Central Bank of the Russian Federation, we can see that the growth rate of premiums exceeds the growth rate of payments. In the same Central Federal District in 2014, insurance organizations received more than 567 billion rubles as insurance premiums, and paid 300 billion less to policyholders (according to table 3 - 257 billion rubles). However, if we consider specific types of insurance and organizations involved in them, then the opposite trend (payments exceed premiums) is observed in non-life organizations, that is, those that do not deal with life insurance.

Table 3 - The volume of insurance payments for the period 2014-2017

Source: CBR data

Analyzing Table 3, we can say that a fairly stable situation is observed in the Siberian Federal District, where the volume of insurance payments has not been growing for several years. Insignificant growth is shown by insurance companies in the North Caucasian, Volga, Far Eastern Federal Districts. Negative dynamics (which is good in the context of insurance payments) in 2017 were shown by organizations from the North-Western, Urals and Southern federal districts.

Table 4 - Number of concluded insurance contracts in the period 2014-2017

27.05.2016

The volume of Russia's GDP in 2015, according to the first estimate, amounted to 80 trillion 412.5 billion rubles in current prices. The index of the physical volume of GDP compared to 2014 decreased and amounted to 96.3%. What is the situation in the insurance market? The Russian insurance market, on the contrary, grew slightly - by 3.7%. Of course, the main market growth was ensured by compulsory insurance, which is based on the growth of OSAGO tariffs. The share of insurance in the total volume of GDP fell significantly, at the end of 2015 it amounted to 1.27%, that is, 10% less than the year before.

In the Belgorod region, in general, the economic situation was somewhat better than the national one. GRP of the region grew by 3%. According to Rosstat data, real money incomes of the population decreased in 2015, and this could not but affect the insurance market. The insurance market of the region fell by 1.5%. The last time the regional market had negative growth rates was in 2012.

Many insurance companies ended their activities in 2015. At the end of last year, the country's insurance market was missing 84 insurers. In 2016, 327 insurers entered the country's insurance market, of which 288 had a non-zero premium collection in 2015. This happened, among other things, due to the tightening of control by the country's financial mega-regulator. For comparison: in 2014 only 11 companies left the market.

The past year 2015 was marked for the Belgorod region by the departure of a fairly large number of participants from the regional market. The number of players decreased from 70 to 59. At the same time, 21 companies left the regional market during the year, and 10 came, and this is the most significant rotation of the Belgorod insurance market players in recent times. Of the companies that emerged last year, only almost 15% of newcomers made it to 2016.

In general, 2015 turned out to be quite stagnant for the insurance market. The fall in the share of investment in the economy, the decline in lending, the decline in the purchasing power of the population - all these factors led to the absence, and in some positions, a drop in growth rates. This is also confirmed by such an indicator as the share of insurance in the total consumer spending of the population. On average, each resident of the Belgorod Region spent 3,125 rubles on insurance in 2015, which is 2% less than in 2014.

The capacity of the insurance market in the region amounted to 4.85 billion rubles. Of this amount, insurance companies paid out 2.1 billion rubles. - this is 43.3% of the level of payments. The average premium for a contract is 4,870 rubles. The share of the region's insurance market in the total Russian volume remained virtually unchanged and amounted to 0.5%. In total, almost a million insurance contracts were concluded in the region - 995 thousand pieces, that is, on average, two out of three residents of the region concluded an insurance contract.

In terms of insurance premiums, the Belgorod Region took 33rd place among all regions, having worsened its position by 5 places. In the Chernozem region, the Belgorod region ranks second in this indicator. In terms of the number of concluded contracts in the all-Russian rating, the region is on the 32nd place. By the size of the average premium, the Belgorod region is the best in the Chernozem region. The Belgorod region is among the top thirty in terms of unprofitability. The most unprofitable region for insurers was the Ivanovo region - the level of payments is 70%. Chukotka and Crimea became the most break-even regions.

Table 1

Insurance portfolio of the Belgorod region, 2015

In contrast to 2014, the core of the portfolio was not property, but compulsory types of insurance - 43%. Here, of course, OSAGO dominates - 41%. Such a large percentage of compulsory types in the portfolio indicates a weak development of the insurance culture in the economy. In fact, people use insurance not because it is an effective tool to combat total risks, but because they force either the state or credit organizations, which, in turn, are well aware of the benefits of insurance. Voluntary insurance lost its positions due to the reaction of insurance companies to the growth of payments and the fall in business profitability, thereby resulting in an increase in the cost of insurance products. Almost 50% of the payout portfolio consists of OSAGO losses.

Let us consider in more detail the types of insurance and their changes in terms of growth.

OSAGO showed the highest growth rate in the region - 148%. The main reason for the growth was changes in tariffs set by the Bank of Russia. Despite this, the situation with OSAGO has not changed dramatically. Insurers are in no hurry to capture the market of compulsory liability insurance for vehicle owners 10 years ago. In the region, the loss ratio was about 76%, this indicator is on the border of profitability. On the whole, in Russia, unprofitability has already crossed the threshold of profitability. In 2014, the only company that showed a profit on OSAGO was Rosgosstrakh, mainly due to the largest portfolio of this type, but at the end of 2015, not a single company remained that generated a profit on OSAGO. In 2015, in the Belgorod region, the number of MTPL contracts concluded decreased by 5% compared to the previous year, while the number of cars registered in the region remained virtually unchanged, on the contrary, slightly increased. This is due not only to the innovations of the Vehicle Registration Law, which allow car owners to register a car not necessarily at the place of registration, but also, among other things, to problems when issuing a policy. Some car owners refuse to issue a policy and continue to drive at their own peril and risk, others acquire fake policies that have flooded the illegal market. Policyholders vote with their feet, that is, they are looking for all sorts of ways to save money, including illegal ones. Obviously, regardless of any economic, including objective, parameters of this type of insurance, the growth of OSAGO tariffs is impossible, this can cause a social explosion. Additional coercive measures will not bring the effect that the authorities expect. Insurers will have to look for ways to optimize costs, primarily by repairing the cars of victims, reducing the level of insurance fraud and reducing legal costs by changing claims settlement procedures.

It is impossible not to note the most important innovations in the compulsory auto insurance market - an electronic policy and a unified assessment methodology. These are revolutionary changes that were introduced in 2015, and these positive innovations were able to stabilize the market, which is in a deep crisis.

Of the few areas of insurance showing growth, one can note the insurance of property of citizens and VHI. In the VHI market, there is now a trend towards the development and implementation of new cost-effective products by insurers and the optimization of existing programs. This has become real due to the emergence of new healthcare facilities that are ready to provide medical services of the required quality at lower prices. Also, having caught the general vectors for the availability of VHI products, many players in this market have relied on retail. The depreciation of the ruble helped to increase fees in this direction, since the issuance of medical travel policies is pegged to the currency.

Insignificant growth was demonstrated by agricultural insurance and OSGOPP (Diagram 2). Property insurance for individuals continues to grow, despite the general decline in the market. Here, in our opinion, the determining factor is the explanation of this phenomenon, not the increase in the financial literacy of the population, but the banal switching of cross-sales with OSAGO from accident insurance to property insurance, that is, the main “additional supplement” to OSAGO was the FL property insurance policy. Despite the positive dynamics and growth in sales, the level of penetration of this type is extremely insignificant.

Property insurance of legal entities has been stagnating for several years now. Here there is a direct correlation with the increased inaccessibility of business to credit funds. Also, the market is developing a factor of tightening the underwriting policy of the leading insurers to accept for insurance risk objects of the property complex of enterprises, which leads to an increase in refusals to accept for insurance or an increase in tariffs.

It is noteworthy that, in contrast to previous years, the share of life insurance premiums in the population's expenditures has significantly decreased. If in 2014 there was growth, now we see almost a 20% drop. In the same way, accident insurance at the expense of citizens experienced a serious drop. In general, such a serious drop over 10 years was observed only in the crisis year of 2008. The population does not have enough free funds to use investment instruments or the cost of voluntary insurance. According to experts, in 2016 the life insurance market will continue to decline. The fact is that previously a large share of this segment was made up of life insurance contracts issued upon receipt of a loan or other banking services, now restrictions on the size of the commission in bancassurance are already ready to come into force, and the demand for investment products will continue to decline due to a decrease in real incomes of the population. Many insurers did not understand the meaning of this product, and it did not become widespread, as it was in the days of the USSR.

Analyzing transport insurance by Autohull risks, we note that in 2014 we observed no growth, then in 2015 the auto insurance market began to decline rapidly, and this happened for the first time in six years. The depreciation of the ruble had a significant impact on the costs of insurers for car repairs, which led to a serious increase in tariffs on the market, thereby scaring away a large number of insurers. Not everyone can afford such costs. In terms of the number of contracts, the fall is even more eloquent: losses amounted to 25% from the previous year. Another factor is the decrease in the number of sales of new vehicles. In 2015, only 3.6% of all car owners in the region had a CASCO policy, having decreased by 1 percentage point compared to 2014. Insurers in their tariff policy in this market have a very clearly visible direct relationship between the level of commission and the price level of the insurance product. Many players, trying to reduce costs and increase the profitability of the segment, reduced remuneration to agents and partners, thereby, taking into account the price sensitivity of CASCO, dropping sales. We assume that insurers will continue to reduce costs, and the most striking factor in this will be the bet on the development of online sales.

The OPO OS market has been falling since its inception, in 2015 this fall was 12%. Initially, this species was programmed to fall, as each year the declining factor of the safety level increases. In 2015, the maximum size of the coefficient Cube -0.6 came into force. Also in 2015 there was a revision of the base rates in the direction of a significant reduction. But, as before, despite the fact that the market has decreased by more than a quarter, this segment remains the most profitable for insurers - the level of payments is 1.5%.

Turning to the analysis of the work of insurers in the region, it must be said that the departure of players consolidates the market quite strongly and condenses the collection figures of the leaders. The ten strongest players collect more than 85% of the total insurance premium in the region. However, the top ten did not change much during the year (Table 2). Confident positions are held by companies with a wide insurance portfolio. As we expected last year, a one-year-old company left the regional market, which led to the movement of the remaining ones to several positions. The insurer, which is part of the structure of Sberbank, lost its positions precisely because of the specialization of the portfolio in life insurance.

table 2

The leader, as in previous years, is Rosgosstrakh, which demonstrates a very significant growth rate (165%) and holds more than a third of the regional market (46%). But compared to last year, Rosgosstrakh has significantly increased the share of auto insurance in the portfolio. The result was not long in coming - the growth rate of payments approached 170%, but, in fairness, it is worth noting that the company keeps the loss ratio at a very good level. In second place is RESO-Garantia with pretty good performance. The only alarming fact is that the company in the region practically works only on auto insurance. There are several such companies: Soglasie, MAX, ZETTA Insurance (former Zurich), Yugoriya, Twenty-First Century and ZHASO bought by SOGAZ - these companies, along with RESO-Garantia, are almost completely engaged in motor types of insurance.

VSK (143%), ZhASO (148%), Welfare (2,766%), Alfastrakhovanie Zhizn (2,135%) and Twenty-First Century showed high rates of collection growth. In addition to VSK, of these companies, the rest specialize mainly in only one type of insurance: either OSAGO, or accident insurance, or life insurance. The largest growth in payments was shown by Sberbank Life Insurance, MAKS, VTB Insurance, Rosgosstrakh Zhizn, ZhASO, Welfare, Yugoriya and Twenty-First Century.

The level of payments above 70% was shown by "Consent", "MAKS", "Yugoria" and "CHANCE". Moreover, Ugoria's payments are almost equal to fees. INGOSSTRAKH has one of the best loss ratios: it paid for such a result with a three-year portfolio reorganization and losses over recent periods. The growth of payments outstrips the growth of fees in the companies Rosgosstrakh, MAKS, VTB Insurance, ZhASO, Yugoria and Twenty-First Century, but Rosgosstrakh has the best loss ratio in this list. Almost all of these companies have auto insurance in their portfolios for more than half of premiums, with the exception of VTB Insurance. In 2014, this insurer also had outstripping growth rates of payments over premiums, and, just as then, the main share of payments fell on property insurance of legal entities.

Table 3

Table 4 provides an analysis of the results of OSAGO activities in the region. Almost half of the market is held by Rosgosstrakh (46%). With an increase in premiums by more than one and a half times (165%), payments doubled (200%). Ingosstrakh showed the largest increase in the number of new OSAGO contracts, more than doubling (7,589 units). SOGAZ increased by more than one and a half times in terms of the number of concluded OSAGO agreements (14,338 units). The number of contracts with VSK increased by a third (40,861 units). More than halved the number of clients of Soglasie and VTB Insurance. Ingosstrakh and SOGAZ have the lowest level of OSAGO payments in the region - 25%. The highest loss ratio for OSAGO was shown by "Consent" - more than 100%.

If we talk about the average cost of the policy, then the lowest contribution was recorded by Rosgosstrakh and UralSib. According to Rosgosstrakh, everything is expected, given the network of representative offices in the region: there are representative offices in each district, and in some territories there are not even divisions of competitors. The most "expensive" policies are from MAKS, Alfastrakhovanie and Ingosstrakh.

Table 4

The lowest tariffs for CASCO (Table 5) were given in the region by Yugoria, MSC and ZETTA Insurance. The company with the largest CASCO portfolio in 2015 has changed. If in the past period it was Consent, now Rosgosstrakh has become the leader. Moreover, this leadership was not won due to low tariffs, customers voted for the reliability of the brand. , where large fleets of vehicles are immediately insured.

Table 5

Hazardous object insurance is the most cost-effective type of insurance. Of course, there is serious competition among insurers for these contracts (Table 6), and given that there are not so many dangerous objects in the region - only 3,000 pieces, the largest federal insurers distributed the market. SOGAZ, as the main "monopolist" in insuring Gazprom facilities, has the highest average premium.

Table 6

The market for compulsory insurance of passenger carriers was distributed differently. Despite the fact that here insurance is directly related to transport, the layout is significantly different from the same OSAGO (Diagram 3). In general, almost 1,400 licensed carriers operate in the region. More than a third of the market is controlled by MAKS. This company has the main fees due to the concluded municipal contract with the large carrier of the city of Belgorod, MUP "City Passenger Transport", which has about 200 passenger carriers in its fleet. Also, the main client in this market is Belkomtrans and its subsidiaries.

The personal insurance market (NS and VHI) also has its favorites. In terms of accident and illness insurance, Rosgosstrakh has the largest shares - 36%, VTB Insurance - 11% and Welfare - 9%. Moreover, the latter has charges exclusively in this direction. The Blagosostoyanie company recently completed a deal to acquire the Russian representative office of the foreign insurance company Intouch Insurance, known for its innovative approaches to auto insurance. By the way, because of this innovative approach, the company received a loss, and the previous owners were forced to leave the market. The main shareholders are the British insurance holding.

In the Belgorod region, only a few companies are engaged in agricultural insurance. The main players are Rosgosstrakh, Alfastrakhovanie and RSHB-Insurance. A small list of insurers is due to the complexity of concluding contracts and underwriting, as well as a high risk component.

Analyzing the result of work on fire insurance (Diagram 4), we note that in terms of work with legal entities in terms of insurance of the property complex of enterprises, the leader is VSK, which occupies a third of the market (31%). This result was achieved, among other things, thanks to the well-established interaction with Sberbank. The same third of the market is held by Rosgosstrakh, but already in work with individuals (30%). The good performance of VTB Insurance and Alfastrakhovanie is due to the work with mortgage borrowers of their "related" banks.

Summing up the analysis of the work of insurers, we traditionally single out the companies that, in our opinion, have achieved the highest indicators. When evaluating leaders, we take into account indicators in several areas: the level of payments, loss ratio, insurance portfolio, market share, etc. In terms of the totality of indicators, Rosgosstrakh, VSK, Alfastrakhovanie and Ingosstrakh - all major players - were among the leaders. We mark "Ingosstrakh" as once again returned to the list of leaders.

In general, despite a rather difficult year, the regional market showed fairly good performance, and in some areas performed better than in the country. Recall what were the most anticipated changes that the insurance market was waiting for in 2015: Legislation to strengthen insurance protection for those traveling abroad, the creation in Russia of a system of home insurance protection in case of emergencies and the creation of a financial ombudsman in the insurance market. The importance and necessity of introducing measures on voluntary home insurance in case of natural disasters is still being discussed.

In conclusion - a small forecast for 2016. We believe that the development of the market will take place in unusually harsh conditions. Insurers will continue to experience pressure, both from the state and, to a greater extent, from customers. There are no prerequisites to expect an increase in tariffs for compulsory types of insurance, and it is unlikely that tariffs for voluntary types of insurance will increase significantly. The only exception can be CASCO, however, these increases will be segmental, aimed at combating unprofitable areas. In this regard, the profitability of insurance will slightly decrease, which will affect the financial results of insurers. Customers will continue to save on insurance, and the market decline is likely to continue. Insurers will have to seriously focus their efforts on developing the service and maintaining positive recognition of their brands, building their work taking into account increased customer focus, including by creating new more budgetary products, modifying existing offers and actively using modern information technologies.