Insurance market growth sees six-year high in 2018 reaching 15.7%

In 2018, insurance premium growth saw a six-year high to reach 15.7% (8.3% in 2017). The total insurance premium volume exceeded 1.479 trillion rubles. The insurance market showed an upward trend even excluding life insurance: growth stood at 8.4% in 2018 (-1.8% in 2017), which is also a six-year record high, according to insurers’ statistics for 2018.

Such insurance market dynamics are attributable to a high demand for consumer and mortgage loans, which have a positive impact on borrowers’ life insurance and health and accident insurance, as well as car insurance markets provided that cars are purchased on credit.

Moreover, the greater accessibility of compulsory car insurance caused by both the stabilisation of loss ratios and the suppression of misconduct by certain market participants changed OSAGO dynamics: the shrinkage of premiums observed in 2017 (-5.2%) gave way to an increase of 1.8% in 2018. The number of contracts executed over the year rose by 4.0% (+0.1% in 2017). Comprehensive vehicle insurance also saw an U-turn in its trend. In 2018, insurance premiums increased by 3.8% (-4.8% in 2017). Growth in this segment was attributable to sales expansion.

Accelerated growth was registered in the health and accident insurance segments (from 12.3% in 2017 to 39.8% in 2018) and borrowers’ life insurance (from 20.3% to 31.4% respectively). Growth rates in other types of life insurance, including investment life insurance, remained high (37.4%) despite a certain decline. Over the year, the share of life insurance rose by 4.7 pp to reach 30.6%.

In 2018, total indemnities increased by 2.5% on the same period last year to stand at 522.5 billion rubles. With previously executed medium-term contracts having expired, life insurance indemnities grew by 83.8% to 67.1 billion rubles.

In 2018, insurance reserves increased by 26% to exceed 1.8 trillion rubles as of 1 January 2019.