Life insurance behind insurance market expansion in the first half-year

Insurance premiums in the first half of 2017 were up 9.5% over the same period the previous year to amount to 646 billion rubles, the latest insurance companies’ reporting shows.

Life insurance is invariably the only significant growth driver accounting for 93.3% of total market expansion. Insurance contributions in the segment went up by 52.4 billion rubles or 60% to a total of 141.2 billion rubles. The rise comes as a result of households becoming increasingly active customers in the segment, on the back of persistently low interest rates on deposits.

Accordingly, the life insurance sector bolstered its position in the first six months as it gained the lead in terms of the number of premiums (with a 21.9% market share) and left OSAGO, a long-time market leader, behind (adjusted for seasonal blips in voluntary medical insurance usually occurring in the first quarters of the year).

Of the other core insurance types, only voluntary medical insurance posted positive momentum (with a 7.5% growth in 2017 H1 growth over the same period a year prior). Premiums in the car insurance sector were down on the back of a 6.6% reduction in insurance contributions for land transport vehicles and a 4% decline in OSAGO.

Demand for insurance services was up as the pace of contract execution in 2017 H1 (25.5% compared to the same period a year prior) outran the growth pace of contributions: in total, 88.5 million contracts were concluded. A rise in the number of insurance contracts with low average premiums was behind the upward trend. The period saw a rise in the number of both contracts with individuals (+24.1%) and legal entities / private entrepreneurs (+39.8%).

Insurance payouts in 2017 H1 were up 12% (+29.5 billion rubles) over the same period last year at 274.3 billion rubles. This growth occurred mainly due to OSAGO (+26.1 billion rubles to 103.6 billion rubles).