The latest country report from GlobalData. It will be interesting to see what happens in the Russian insurance sector once the conflict in Ukraine is resolved;
The Russian general insurance industry is set to grow at a compound annual growth rate (CAGR) of 8% from RUB1.8 trillion ($20.9 billion) in 2024 to RUB2.5 trillion ($26.9 billion) in 2028, in terms of gross written premiums (GWP), forecasts GlobalData, a leading data and analytics company.
GlobalData’sInsurance Databasereveals thatthe general insurance industry in Russia is expected to grow by 11% in 2024,driven by government initiatives aimed at enhancing regulatory supervision coupled with economic growth that will bolster key sectors of the country.
Aarti Sharma,InsuranceAnalyst atGlobalData, comments: “Russia’s general insurance industry grew by 14.6% in 2023, driven by an increase in vehicle sales and rising demand for private health insurance. The trend is expected to continue in 2024. However, the industry growth rate is expected to gradually slow down during 2025-28, due to moderate economic growth.”
Motor insurance is the leading line of business in the Russian general insurance industry, which is expected to account for a 40.6% share of GWP in 2024. It is forecast to grow by 15% in 2024, supported by an increase in vehicle sales. According to the Ministry of Industry and Trade, total vehicle sales are expected to exceed 1.32 million vehicles in 2024, an increase of 20% as compared to 1.06 million vehicles in 2023.
The growth of motor insurance will also be supported by the rising sales of electric vehicles (EVs). According to the ministry, EV sales increased by 265% in Q1 2024 to 6,374 units as compared to 1,744 units during the same period in the previous year.
Sharma adds:“Recent regulatory developments will also support motor insurance growth. Effective March 2024, the Central Bank of Russia (CBR) introduced short-term mandatory motor insurance contracts ranging from one day to three months. These contracts cater to motorists who use their car occasionally and for those who temporarily let their vehicles to others.”
TAXI MARKET
Additionally, in June 2023, the government introduced a new law that mandates taxi drivers in the country to obtain civil liability insurance for passenger and luggage transportation.Taxi operators are now required to enter into an insurance contract for each vehicle registered in the regional registry of passenger taxis to provide passenger transportation services. The law will come into force on September 1, 2024, providing a transition period for both insurers and taxi drivers to comply with the new requirements.
As a result, there was a significant 39% year-on-year growth in motor insurance premiums in 2023.The law, once enforced, will further contribute to the growth of motor insurance, which is forecasted to grow at a CAGR of 8.8% over 2024–28.
Non-life personal accident and health (PA&H) insurance is expected to account for 26.5% share of the GWP share in 2024. It is expected to grow by 6.9% in 2024, due to increased health awareness after the pandemic.
HEALTH COVER
Russia has mandatory public health insurance. However, the demand for voluntary health insurance, over and above public insurance has increased significantly over the last few years. Lower waiting periods, higher coverage, and consultation with specialized doctors and medical staff are the most common factors for people opting for voluntary health insurance in Russia. PA&H insurance is expected to grow at a CAGR of 7.2% during 2024-28.
Property insurance is the third-largest line, accounting for a 20.4% share of the GWP in 2024. Property insurance growth slowed down in 2023, owing to reduced premium collections in construction and installation risk insurance. According to CBR, there was a 12% decline in property insurance premium collections in Q1 2024. Property insurance is expected to grow at a CAGR of 6.5% over 2024–28.
Financial lines, liability, marine, aviation, and transit (MAT), and miscellaneous insurance are expected to account for the remaining 12.5% share of the general insurance GWP in 2024.
