Bank of Russia starts publishing results of monitoring of misconduct risks in OSAGO market in regions
The regional monitoring by the Bank of Russia is based on the analysis of a number of performance indicators of insurance companies and the relevant risk profiling of the constituent territories of the Russian Federation. The profiling is done depending on the intensity of and trends in adverse factors associated with the abuse of law, violations and legal offences, primarily frauds, in the industry of compulsory motor third-party liability insurance (OSAGO).
To assess and monitor misconduct risks, the Bank of Russia relies on the official reporting submitted by insurers.
According to the analysis performed, the materialisation of fraud risks affects a range of statistically significant regional financial and non-financial metrics, including the frequency of insured events, the average insurance payment and the rolling ratio of insurance payments.
Depending on how much a regional value of each of the indicators being analysed exceeds the countrywide level, every constituent territory of the Russian Federation gets a penalty score. Based on the total penalty score, the constituent territories are classified into three groups: red, yellow and green.
The Bank of Russia is going to publish results of the monitoring on a quarterly basis. As of 1 October 2019, nine constituent territories of the Russian Federation are in the red zone. These regions are exposed to increased risks of violations on the part of unfair insurance market players in the course of OSAGO contract procedures and claim handling.