Russia’s general insurance industry is expected to gain momentum over the coming years after seeing slow growth over the pandemic period, according to GlobalData. The leading data and analytics company forecasts growth in gross written premium (GWP) from $16.0 billion in 2020 to $19.3 billion in 2025 – representing a steady compound annual growth rate (CAGR) of 4.9%.
Ashish Raj, Insurance Analyst at GlobalData, comments: “We are seeing clear indications of a Russian revival in 2021, with the country’s economy expected to grow by 4.1% by the end of the year as it benefits from rising oil and energy prices. As the economy recovers, more people will leave the house for work or leisure (inviting the higher risk of injury), make property purchases, and travel – all activities that lead someone to seek insurance services. On top of that, Russia has some favorable government policies that provide invaluable support to companies in this space.”
Ashish Raj offers his views on the key segments in the Russian general insurance industry:
Personal accident and health (PA&H)
“PA&H insurance is the largest general insurance segment in Russia, having accounted for 33% GWP in 2020. The segment grew at a slower rate of 3.1% in 2020, compared to the 14.4% growth seen in 2019, due to pandemic-induced lockdown restrictions.
“The PA&H segment reported a significant recovery in Q1 2021, with many corporates increasing the benefits offered to employers under group health insurance policies. GlobalData forecasts the PA&H insurance segment in Russia to grow at a CAGR of 6.1% between 2020 and 2025.”
Property insurance
“Property insurance is the second-largest segment within Russia’s general insurance industry, having accounted for 23.8% of the general insurance GWP in 2020. The segment is forecast to grow at a CAGR of 6.1% during 2020-25 driven by the government’s push for infrastructure development.
“This segment will see growth due to a high need for agriculture insurance due to its vulnerability to natural hazards and proposed regulatory changes that will make insurance compulsory on mortgage borrowings.”
Marine aviation and transit (MAT)
“MAT accounted for 20.3% of Russia’s general insurance GWP in 2020. MAT insurance in Russia, the second-largest MAT insurance market in Europe, declined by 6.9% in 2020 due to border closures and travel restrictions during the pandemic. The segment is forecast to grow at a CAGR of 3.7% in 2020-25, driven by a resumption in travel and an increase in oil exports.”
