Insurance market keeps growing in Q1 as economic recovery continues
2021 Q1 insurance payouts went up 7.9% relative to the same period last year to 460 billion rubles. Positive trends prevailed across all core sectors, except for corporate property insurance and investment life insurance, according to Review of Key Indicators of Insurers.
The key development factor for the insurance market in early 2021 was substantial growth in credit life insurance following a rapid expansion in mortgage and consumer lending. Premiums in life insurance were up nearly 20%, accident and disease insurance premiums went up 30%. This trend is likely to persist through the end of this year. According to a Bank of Russia forecast, household lending growth is set to accelerate in 2021.
Low deposit rates combined with rising yields of debt instruments (the underlying asset of funded life insurance) to support customer interest in funded life insurance offerings.
The voluntary health insurance segment largely returned to growth thanks to extensions of major corporate contracts. At the same time, premiums on insurance contracts with individual entrepreneurs and small companies continued to decline.
Growing numbers of car loans, rising car prices and demand for them in the corporate segment contributed to an increase in car insurance premiums.
Insurance payouts were up 16.2% to 185.3 billion rubles in Q1 as more payments were made under medium-term life investment insurance agreements. At the same time, a reduction in payouts was seen in most major types of insurance.
The profitability of the insurance market declined but remained high at 25.6%. In Q1, insurers’ profits shrank by nearly one-third to 49.4 billion rubles. Meanwhile, their structure changed as the share of net income from insurance services went up and that from investment decreased (mainly due to FX revaluation).