Insurance Market: Q1 Performance

In Q1 2017, annual growth of insurance premiums slowed down to 5.2%owing to a negative trend in the mandatory insurance field. The total amount of insurance premiums collected reached 316.3 billion rubles, or 1.4% of GDP. According to the Review of Key Indicators of Insurers, the share of life insurance grew by one third, reaching 0.3% of GDP.

Life insurance premiums recorded prominent growth (+44.4%) amid a decline in the number of concluded insurance contracts. This trend is caused by structural changes in the segment, in particular, a larger share of investment products, with higher average premiums (364.6 thousand rubles) than those of life insurance.

Total pay-outs by insurers in Q1 edged up by 5.2% to 123.5 billion rubles. OSAGO pay-outs went up prominently (+46.4%) with average pay-outs increasing by 12%, coming to 70.3 thousand rubles. Elevated costs in the OSAGO segment spurred the increased combined loss ratio across the whole market (by 1.9 pp over the year, reaching 95%).

In Q1, Russian insurers’ total assets increased by 24.2% to 2.1 trillion rubles. Growth slowdown and higher costs were behind a decline in insurers’ net profit, which fell by 61.6% (18.3 billion rubles). Return on equity also dropped to 15.7%.