Regional Differentiation of Russian Insurance Market and Consumer Trust

Abstract

The results of the study conducted by the authors show a low level of insurance culture in Moscow, a high level of fraud by unscrupulous market participants, imposition of insurance products on customers, a low level of profitability on accumulative insurance and investment insurance programs, which leads to a low level of consumer trust in insurance products. These problems mentioned above allow us to talk about negative image of insurance companies and high reputational risks. At the same time, existing studies prove a stable relationship between reputation and image management and gaining client’s trust, which as a result, affects the profitability of insurers. Regional features cause significant differences in the degree of development of insurance market in the Russian Federation. In this regard, it seems relevant to develop a comprehensive indicator that could characterize dynamics of shaping a positive image of the insurance industry, as well as its comparative intercountry and interregional position. The authors propose a methodology for the calculation of the index aimed at image assessment of the insurance industry, which takes into account dynamics of voluntary insurance market, competition, market concentration, consumer loyalty index, as well as level of digitalization of the insurance market in the region. The results of the assessment of insurance market index of the Russian Federation for 2020 made it possible to conclude that image of the insurance industry in the eyes of consumers is not high. Gradual development of positive image of insurance market is possible through focused campaigns aimed at youth, stimulation of the use of digital channels and services, financial literacy improvement and financial culture development.