Insurers estimate demand for military risks and foreign policies

Clients of large insurers have become interested in insurance against war risks, although they do not provide these services, RBC was told in a number of companies. And the policies of those traveling abroad are now taken by relocants,

Large insurers have recorded demand from customers for military risks, as well as low interest in the policies of those traveling abroad, representatives of insurance companies told RBC, summing up the results of 2022.

On the part of clients, there is a demand for "war risks", especially in the border areas, says Igor Lappi, CEO of Sovcombank Insurance. The same trend was seen in Absolut Insurance.

“Businesses are becoming interested in military operations. We received requests for insurance of war risks in relation to cargo, ships, cars, special equipment,” said Mikhail Chernykh, Deputy DIRECTOR of the Underwriting and Reinsurance Department at Absolut Insurance.

However, the Civil Code provides that military risks can serve as a basis for exempting insurers from paying compensation, unless otherwise provided by the contract, that is, such risks can be insured only if it is expressly provided for in the contract, Chernykh explains. Absolute Insurance and Sovcombank Insurance, like most other companies, do not provide such coverage, their representatives said. Other major insurers did not respond to a question about these types of services.

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How has travel insurance changed?

Demand rates for travel abroad policies (TPOs) vary across companies. A TCD policy may include accident and illness insurance, medical insurance, financial risk insurance for citizens, etc.

how to start moving forward in your career How Pepsi promised to donate a fighter plane and suffered a PR disaster According to Lappi, in Sovcombank Insurance, the TCD segment in 2022 compared to 2021 showed a constant increase month on month, despite significant obstacles for travelers. At the end of 11 months of 2022, premiums grew by 168% for the entire portfolio of TCDs. This is due both to the company's internal decisions and to external factors, including the relocation of Russians, Lappi lists. He reminded that in this case, the traveler also needs a TCD policy, but its validity should not exceed more than 182 days in total per year in one territory. From the point of view of the tourist flow, 2021 and 2022 are very similar, compares Vitaly Knyaginichev, HEAD of the Ingosstrakh Retail Business Directorate. Almost until mid-2021, most mass destinations were closed due to the pandemic, in 2022, after a good January - early February, there was an almost complete lull until the summer. The number of contracts in Ingosstrakh, however, increased - from 712 thousand (11 months of 2021) to 859 thousand contracts (11 months of 2022), that is, by 20.6%. At Soglasiya, sales of VZR policies fell by 7%, which is explained by a decrease in the flow of tourists in the conditions of the closure of many destinations for Russians, an increase in the cost of tours, difficulties with obtaining visas and reducing flights, said a representative of the insurance company. “The TCD insurance segment, which has not yet had time to properly recover from the collapse caused by pandemic restrictions, has shrunk even more this year,” said Yulia Shabanova, head of the agency and office sales unit at Rosgosstrakh. She noted that there is a reorientation to domestic tourism and insurers hope that in the future the demand for insurance policies for trips to Russian resorts will increase, which will partly compensate for the drop in sales of policies for those traveling abroad. The VZR market collapsed catastrophically back in the era of quarantine in 2020, but in 2022 there is “albeit microscopic, but still growth compared to last year,” says Evgeny Popkov, head of product management and marketing at IC MAKS.

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Is there a demand for property insurance?

Most of the surveyed insurers do not record an increase in demand for property insurance. Rosgosstrakh sees a slight increase in fees in home and property insurance compared to last year, but this depends, among other things, on updating insurance amounts for real estate, the value of which has seriously increased this year, Shabanova admits.

In 2022, taking into account two “shock” periods, we can talk about a decrease in demand for voluntary property insurance, which does not include mortgage insurance. This happened due to the partial migration of the population and the partial mobilization of the able-bodied population, Lappi argues. For mortgage insurance, demand has not changed and is approximately at the level of last year, he added.

In the context of a tense economic situation and a decrease in real incomes of the population, real estate insurance, as well as personal types of insurance (life and HEALTH, for example), is traditionally not a priority for consumers - this sector is most sensitively correlated with general trends, explains the representative of "Consent".

The dynamics of sales of property types of insurance this year does not allow us to talk about any significant transformations in the insurance culture, this is especially clearly seen in the example of Casco, Popkov adds: “On the one hand, we are seeing a decrease in the volume of new car insurance, since the country’s which month shows a multiple drop. On the other hand, there is no significant growth in the used car segment. Car owners are in no hurry to purchase insurance coverage, despite all the current difficulties and uncertainties in the matter of spare parts. Voluntary insurance still has a very low priority in the budget of our citizens, and many do not hesitate to refuse these expenses in favor of more urgent ones.

According to the Central Bank, in the first half of 2022, the profit of Russian insurers against the backdrop of sanctions fell by 62% compared to the same period last year, to 46.1 billion rubles. The main reason is losses from the investment activities of life insurers. The fall in the market softened the increase in premiums in auto insurance and VHI due to higher prices for auto parts, cars and medical services, the regulator noted in a review.