Russian Federation Financial Sector Assessment Program : Insurance Sector Technical Note
This technical note covers the insurance sector supervised by the CBR. The analysis was carried out as part of the 2016 Financial Sector Assessment Program (FSAP) of the Russian Federation, and was based on the regulatory framework, supervisory pra...
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/08/26739353/russian-federation-financial-sector-assessment-program-technical-note-insurance-sector http://hdl.handle.net/10986/25065 |
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okr-10986-250652021-06-14T10:17:50Z Russian Federation Financial Sector Assessment Program : Insurance Sector Technical Note World Bank International Monetary Fund regulatory framework insurance sector market structure insurance premiums insurance risks This technical note covers the insurance sector supervised by the CBR. The analysis was carried out as part of the 2016 Financial Sector Assessment Program (FSAP) of the Russian Federation, and was based on the regulatory framework, supervisory practices and other conditions as they existed in March 2016. Relevant information including laws, by-laws and regulations as well as responses to a questionnaire sent out in advance were provided by the Central Bank of Russia (CBR) before and during the mission. The assessment has been supported by discussions with the CBR and the insurance market participants. the Russian insurance industry ranked 27th in the world. Non-life insurance premium accounted for 89 percent of GPW while life insurance for only 11 percent. Another factor that further undermined the profitability of the insurance industry in 2013-2015 has been the raising claims inflation in the MTPL segment of the market. In 2015, the industry also faced with the consequences of the Western economic sanctions which effectively closed access to the high quality Western reinsurance capacity for the Russian insurers that provide coverage for 1500 large Russian companies that were put on the sanctions list. In the past, the Western reinsurers provided over 80 percent of reinsurance capacity for such risks. The further consolidation of the sector will lead to a better performing insurance market.In the case of Russia, the main objective of insurance supervision is to ensure that insurers fully comply with core regulatory norms fixed by the law in the following four areas of insurance operations: (a) solvency (capital adequacy); (b) insurance reserves; (c) assets covering own funds; and (d) assets covering reserves. The most profound implications of the current rule-based insurance supervision is a likely underestimation of the sector’s solvency. While the dispersion of insurance supervisory functions among numerous CBR departments with various reporting lines carries certain advantages (such as a reduced potential for the conflict of interest), it also has a potential for major drawbacks. 2016-09-13T20:39:42Z 2016-09-13T20:39:42Z 2016-07 Report http://documents.worldbank.org/curated/en/2016/08/26739353/russian-federation-financial-sector-assessment-program-technical-note-insurance-sector http://hdl.handle.net/10986/25065 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Financial Sector Assessment Program Europe and Central Asia Russian Federation |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
regulatory framework insurance sector market structure insurance premiums insurance risks |
| spellingShingle |
regulatory framework insurance sector market structure insurance premiums insurance risks World Bank International Monetary Fund Russian Federation Financial Sector Assessment Program : Insurance Sector Technical Note |
| geographic_facet |
Europe and Central Asia Russian Federation |
| description |
This technical note covers the insurance
sector supervised by the CBR. The analysis was carried out
as part of the 2016 Financial Sector Assessment Program
(FSAP) of the Russian Federation, and was based on the
regulatory framework, supervisory practices and other
conditions as they existed in March 2016. Relevant
information including laws, by-laws and regulations as well
as responses to a questionnaire sent out in advance were
provided by the Central Bank of Russia (CBR) before and
during the mission. The assessment has been supported by
discussions with the CBR and the insurance market
participants. the Russian insurance industry ranked 27th in
the world. Non-life insurance premium accounted for 89
percent of GPW while life insurance for only 11 percent.
Another factor that further undermined the profitability of
the insurance industry in 2013-2015 has been the raising
claims inflation in the MTPL segment of the market. In 2015,
the industry also faced with the consequences of the Western
economic sanctions which effectively closed access to the
high quality Western reinsurance capacity for the Russian
insurers that provide coverage for 1500 large Russian
companies that were put on the sanctions list. In the past,
the Western reinsurers provided over 80 percent of
reinsurance capacity for such risks. The further
consolidation of the sector will lead to a better performing
insurance market.In the case of Russia, the main objective
of insurance supervision is to ensure that insurers fully
comply with core regulatory norms fixed by the law in the
following four areas of insurance operations: (a) solvency
(capital adequacy); (b) insurance reserves; (c) assets
covering own funds; and (d) assets covering reserves. The
most profound implications of the current rule-based
insurance supervision is a likely underestimation of the
sector’s solvency. While the dispersion of insurance
supervisory functions among numerous CBR departments with
various reporting lines carries certain advantages (such as
a reduced potential for the conflict of interest), it also
has a potential for major drawbacks. |
| format |
Report |
| author |
World Bank International Monetary Fund |
| author_facet |
World Bank International Monetary Fund |
| author_sort |
World Bank |
| title |
Russian Federation Financial Sector Assessment Program : Insurance Sector Technical Note |
| title_short |
Russian Federation Financial Sector Assessment Program : Insurance Sector Technical Note |
| title_full |
Russian Federation Financial Sector Assessment Program : Insurance Sector Technical Note |
| title_fullStr |
Russian Federation Financial Sector Assessment Program : Insurance Sector Technical Note |
| title_full_unstemmed |
Russian Federation Financial Sector Assessment Program : Insurance Sector Technical Note |
| title_sort |
russian federation financial sector assessment program : insurance sector technical note |
| publisher |
World Bank, Washington, DC |
| publishDate |
2016 |
| url |
http://documents.worldbank.org/curated/en/2016/08/26739353/russian-federation-financial-sector-assessment-program-technical-note-insurance-sector http://hdl.handle.net/10986/25065 |
| _version_ |
1764458286976860160 |