Bank of Russia analyses relationship between OSAGO and insurers losses

The OSAGO market is facing difficult times, caused by intermediaries’ activities in the regions, weak demand and increased average indemnities. According to the Review of Insurance Companies’ Key Indicators, the circumstances have a significant impact on the insurers’ loss ratios.

The Bank of Russia analysis reveals a relationship between loss ratio and share of OSAGO in the insurer’s portfolio: the larger the share, the higher the loss ratio. Thus, companies with an over 40% OSAGO share have an above-average loss ratio.

At the same time, a negative relationship is observed between business expenses and the OSAGO share: average market business expenses are lower if OSAGO accounts for more than 80% of the insurers’ portfolio.

Composite loss ratio (describes the profitability of insurers’ activities) for OSAGO insurers is above market average — 88%, making OSAGO less attractive for insurance companies, says the Review.