Like in Belarus
The Belarusian market for insurance services has been quite stable for several years. More than a dozen insurance organizations of various forms of ownership work here, most of them have more than 20 years of experience. The past year has proven to be difficult, however: insurance payments have increased much faster than insurance premiums. However, according to the Ministry of Finance, in 2022 insurance premiums in the amount of 1.8 billion Belarusian rubles were collected, which is 4.8% more than in 2021. For comparison: there a year ago, the growth rate was much stronger at 12.3%.
In the Belarusian Association of Insurers (BAS), the main trend of the past year is the unprofitability of the main types of mass insurance. According to the experts of the association, in 2022, both the number of insured events and the amounts paid have increased. As a result, insurers had to deal with the consequences of such trends throughout the year: someone raised rates, someone regulated the claims process. The engine of growth was travel health and accident insurance. After a pause brought by the risks of pandemic and the closing of borders, this type of insurance posted a growth of 34%. Thus, conclude the experts, personal insurance has regained its leading position.
The main trend in Belarus, experts call the unprofitability of mass types of insurance
In January-September last year, the best indicators of growth in the total amount of voluntary insurance premiums were presented, in particular, by life insurance, medical expenses, against accidents, while citizens less frequently insuring property. And at the end of the year, the share of voluntary types of insurance in the total amount of insurance premiums amounted to 65.4% (in January – December 2021 – 64.2%). As for the mandatory types, there are more than a dozen of them, but the vast majority of contributions are made for two of them – liability insurance for vehicle owners and against accidents at work and occupational diseases.
The introduction of a long-awaited novelty from October 1, 2022 has somewhat revived attention on the topic of insurance. We are talking about voluntary insurance of a supplementary pension by capitalization (project called “three plus three”). This is a program for the formation of a future nest egg at the expense of our own voluntary contributions and co-financing by the state (with the participation of the employer). The point is the following. Employees are offered to pay from their salary from 1 to 10% as an additional contribution to a future funded pension. By choosing a tariff of 1 to 3%, the State doubles the contribution, and by choosing from 4 to 10%, it adds 3%. You can join the new insurance program up to three years before reaching the generally established retirement age.
The Stravita insurance company, designated by the State as the sole executor of the new program, gives the following diagram. The average salary in the country in January amounted to 1,685 Belarusian rubles (50,415 Russian rubles), and the amount of the average old-age pension was 670 Belarusian rubles. rub. (20,045 Russians). A person with an average salary, who signed an insurance contract for a capitalized supplementary pension with deductions of 3% of the amount earned 15 years before taking a well-deserved rest, after reaching retirement age, will receive an additional 606 Belarusian rubles. rub. (18,132 ros.) monthly for 5 years or 303 Bel. ruble (9066 ros.) monthly for 10 years.
- The new type of insurance is in great demand: at the beginning of March, more than 13.6 thousand people took advantage of the program, – explains Anzhela Zaboronok, head of the Stravita sales department.
The news that Belarus, together with Russia, has been excluded from the international civil liability insurance system for vehicle owners “Green Card” surprised Belarusian insurers. The mutual recognition obligations of these certificates expire on June 1 at midnight. In this respect, the specialists base great hopes on the rapid creation of a system of compulsory insurance of the civil liability of the owners of vehicles of the State of the Union. The draft document is being considered in the Parliamentary Assembly of the Union of Belarus and Russia.
Like in Russia
The insurance market in Russia is relatively young, but with a rich history: the first “Russian Fire Insurance Company” was established in 1827.
Almost everything can be insured today. But the most popular is still the OSAGO policy – in 2022, 40.3 million of them were issued. In addition to the “classic insurance” of property and health, there are quite exotic options for this service. For example, you can insure a cat and a dog, you can insure bees – the whole “family” of up to 80,000 individuals at once. The so-called insurance against non-departure is also common, when the cost of the trip is returned to the traveler in the event of force majeure. You can insure a painting, coins and even… a voice.
The potential of the Russian insurance market is huge, domestic and foreign industry experts are convinced of this. Russia still lags behind other countries in terms of insurance premium per capita, which averages around $100 per capita per year. By comparison, insurance premiums in Japan are $5,080, in Switzerland $4,507 and in the United States $2,372. At the same time, according to the most optimistic estimates, no more than 15% of potential risks are insured in Russia, so there is certainly room for growth.
This year, a slight recovery in growth is expected to the level of seven percent, analysts from Expert RA came to this conclusion. The drivers of the insurance market will be life insurance (the growth of this segment could be 9-11%), as well as accident and health insurance (up 12-14%).
A dynamic close to zero will be observed in voluntary body insurance. The reason for this is the shortage of new cars, as well as a drop in demand due to rising prices for the insurance product itself. OSAGO will grow, as the so-called tariff corridor was expanded last year. Voluntary health insurance (VHI) will show growth of three to four percent, growth that will be held back, among other things, by citizens’ desire to save money. As for property insurance, growth in this segment can be 6 to 7%.
Insurers are adapting to the situation, the insurance market, of course, will live, is sure Svetlana Gusar, vice-president of the All-Russian Union of Insurers.
In Russia, the most popular is still the OSAGO policy – in 2022, 40.3 million of them were issued
“The insurance market always reacts to the situation with a certain delay, because our current contracts, as a rule, are annual. From what the market now learns – how to live with a shortage of spare parts, how respond to the changing needs and requirements for risk coverage, which come from the citizens, there are changes in the so-called reinsurance protection, since the traditional markets no longer work for us”, she listed .
According to the expert, the needs of citizens and legal persons are now changing, and the market is adapting its work. At the same time, it is still difficult to predict the estimated indicators of the dynamics.
“The insurance market is now faced with the question of adjusting strategic objectives. They were validated and should have formed the basis of the development strategy at the end of 2021. We stopped in 2022. On average, the process of developing wishes on how the insurance companies see the evolution of the situation taking 9 months to a year So I think that by the end of 2023 we will have a new strategy for the development of the insurance market”, summed up Svetlana Gusar.
