The Russian insurance market, 2008

The financial crisis proved the insurance sector being unable to develop by way of dumping and imputed insurance. 2009 will see Russian insurers paying for past mistakes. As a result the market would be less sizeable, but more professional.

In 2008 the world financial crisis divided the Russian insurance market development into two unequal parts: pre-crisis and post-crisis. General indicators of the insurance market (555 bln rubles of insurance premium, increment by 14.2% comparing with 2007, slowed rate of growth by 5.3 percentage points) are rather misleading and do not present an objective picture. Taking statistic data of the first and the second half of 2008 separately makes the picture look clearer.

The first half of 2008 witnessed the real autocasco bum. Easily accessible and cheap credits to purchase a car with insurance being a necessary condition produced notable results: according to Expert RA autocasco collections in the first half of 2008 went up by 35.1%, and the whole insurance market increased its volumes by 17.6% in comparison with the first half of 2007. When the crisis has begun, the market went stagnant. Statistics for the second half of 2008 comparing with the second half of 2007 are quite illustrative: autocasco premium increment slowed down to 15.3%, and the whole market - down to 10.6%. Next to autocasco significant decrease at the second half of 2008 was shown by cargo insurance (1.0 to -32.7%), voluntary medical insurance (23.4 to 2.6%), insurance of outgoing travelers (42.1 to 17.8%), insurance of individuals (38.6 to 15.8%).