Insurance market prospects: discussion at Bank of Russia
The Bank of Russia held a traditional meeting with insurance industry representatives and the All-Russian Insurance Association to discuss such topical issues as the development of compulsory motor third-party liability insurance (OSAGO), life insurance, mandatory health insurance, as well as the influence of the ESG agenda on the insurance industry.
The participants in the meeting expressed a positive opinion regarding the results of the customisation of OSAGO premiums. After the range of premiums in OSAGO was expanded in September 2020, higher-risk drivers started to pay more for their insurance policies, whereas premiums for accurate drivers decreased. The Bank of Russia emphasised that insurers should make OSAGO affordable. The establishment of a reinsurance pool will help address this task as it will allow a more efficient and uniform distribution of high loss making OSAGO policies among all insurers. The regulator supported this idea.
The participants discussed possible areas for OSAGO improvement, such as higher limits on life and health insurance payments for road accident victims, as well as cancellation of depreciation accounting when calculating a payment. According to the Bank of Russia, these changes should be implemented stage by stage, considering the assessment of their impact on insurance premiums.
Life insurance has been driving the growth of the insurance market in recent years. However, this rise should be ensured by products meeting customers’ needs and expectations. Therefore, the regulator will set minimum requirements for such insurance policies, including the requirements for information disclosure when they are sold, which will help protect insured persons’ interests and prevent misselling. The Bank of Russia has submitted the relevant regulation to the Ministry of Justice for registration.
Other topics discussed at the meeting included possibilities for developing insurance principles in mandatory health insurance and the implementation of pilot projects in several regions, as well as the preparedness of the insurance community to introduce ESG principles.