Information on insurers’ capital adequacy to be presented on Bank of Russia website
The Bank of Russia starts publishing data on insurers’ capital adequacy ratio (CAR) showing whether a company has a sufficient amount of equity (capital) to meet its obligations. This is an indicator of a company’s financial stability and solvency.
The disclosure of these data will enhance the transparency of the insurance sector and promote confidence in it. Along with other parameters, consumers will be able to factor in this information when purchasing insurance services, while experts, analysts and investors — when assessing financial institutions.
A company should have an adequate amount of capital to be able to fulfil its obligations even during economic downturns. Therefore, according to the Russian law, the CAR must equal at least one. A lower value does not necessarily mean that a company is unable to meet its obligations, but indicates the risk of problems in crisis conditions. To avoid this risk, insurers are to bring their CAR values in compliance with the requirements of the law.
The first publication is based on insurers’ reporting as of 31 January 2024. In the future, this information will be disclosed on a monthly basis within two months after the reporting date.