Russian Insurance Research Articles

Development of sustainable insurance in Russia

Development of sustainable insurance in Russia

Russian mutual insurance market: Limitations for development

Aim. To assess the practical significance of the possible implementation of some proposals aimed at the development of the insurance market, based on the analysis of statistical data on the activities of insurance organizations and mutual insurance societies, particularly in the field of insurance of civil liability of notaries.Objectives. With the help of statistical data on the activity of insurance organizations and mutual insurance societies to identify the practical significance of the initiative and its impact on the development of mutual insurers in the insurance industry.Methods. The present study is built on the basis of empirical methods such as observation, comparison, generalization, induction, deduction.Results. The authors analyzed the activity of insurance companies in 2023 in the aspect of insurance organizations and mutual insurance societies, including the impact and significance of the type of insurance of civil liability of notaries on the insurance industry. Taking into account the actually full coverage of notaries by insurance services required by law, there are no problems in the conclusion and execution of these insurance contracts, according to the author’s position. The presence of an insignificant number of insurance organizations in this segment and small volumes of premiums in relation to the total premium collections indicate a low interest of insurers in this type of insurance. Today the market of compulsory insurance of notaries is actually covered and closed for new players. The authors believe that admission of mutual insurers to this segment will not practically lead to the development of mutual insurance and improvement of the insurance market as a whole.Conclusions. Despite the tasks set by supervisory and regulatory authorities to strengthen and develop the insurance market, the initiatives put forward to modernize the mutual insurance market are noteworthy and are certainly important, timely, but insufficient for the realization of the set tasks. The authors conclude that the admission of mutual insurers only to the market of notaries’ liability insurance will not be a significant stimulus for the development of mutual insurance and improvement of the Russian insurance market.

Today’s Finance Markets in Conditions of Poly-Crisis and Crisis of Cost of Living

The article provides characteristics, statistics and factual material on countries connected with the current global economic crisis of the cost of living. The notion of the current poly-crisis was defined as a sum total of old and new risks in their close interaction and their adverse impact on global and national economy and finance markets. The focus was made on tightening of monetary and credit policy of national central banks in 2022–2023 in view of combating inflation, which resulted in more expensive credits, higher profitability of state treasury bonds, bankruptcy of corporations and declining standard of living of people. On the background of the global poly-crisis the author assessed macro-prudential policy of the Bank of Russia and standing of its banking system, including market of preferential mortgage with state support. Within the frames of crisis-management risks of Russian insurance and re-insurance industries were shown, as well as non-credit life insurance as a today’s driver of insurance market growth. In view of import-substitution policy an important innovation of the Moscow exchange – the informational-analytical, financial and trade terminal ‘Trade Radar’ was put forward. The author showed economic essence, trends and tools of de-dollarization policy of Russia and friendly countries, including BRICS project aiming at development of common supranational payment unit.

Economic aspects of life insurance in Russia

Economic aspects of life insurance in Russia

The Problem of Defining Insurance of Business and Financial Risks in Russian Legislation

The development of Russian insurance legislation is associated with the presence of certain differences in the legal regulation of the insurance business; in particular, there is the problem of classifying certain types of insurance: business insurance and financial risk insurance. The purpose of the study is to consider sequentially the main stages of the development of insurance legislation in terms of insurance of business and financial risks, which would allow us to identify, on the one hand, the reasons for changes in insurance legislation, and, on the other hand, to form the authors’ own standpoints on this issue and draw appropriate conclusions. The article examines the changes made to national insurance legislation over the course of a quarter of a century, and identifies contradictions and differences in the definitions of insurance of business and financial risks. The authors have drawn the conclusion that there is a global cause of the observed phenomena, which is the absence in our country of a single codified normative legal act regulating insurance relationships — the Insurance Code. According to the authors, the development and adoption of such a systematic set of insurance legislation would be the most important step towards solving the problem of classifying types of insurance, in particular business risk insurance and financial risk insurance.

Социальное страхование в России

Social insurance in Russia plays an important role in ensuring social protec-tion of citizens. This system involves providing citizens with material support in case of various situations, such as illness, disability, disability, loss of breadwin-ner, old age and death of the breadwinner.

АНАЛИЗ РЫНКА СТРАХОВЫХ УСЛУГ В РОССИИ: ПРОБЛЕМЫ, ПЕРСПЕКТИВЫ

The economic security of the company can be determined by analyzing the Russian insurance market. It is stated that over the past few years, the Russian insurance market has not escaped many problems related to economic fluctuations and sanctions, as has the entire economy of the country. Based on the analysis of various sources, the article substantiates the relevance of the problem, identifies the special role of new-level information systems with artificial intelligence and a distributed registry for the exchange of digital financial assets in the service market, and attempts to determine the financial stability of the Russian insurance market. It has been established that the insurance market in Russia in recent years shows that it has gone through a period of significant changes and adaptation to new economic conditions. The author suggests various areas and types of insurance that ensure the growth of the Russian market for these services. In general, the Russian insurance market demonstrates stability and readiness for change. Despite the challenges, it continues to develop, adapting to new economic realities and maintaining the potential for growth and development. Forecasts for the coming years suggest moderate growth and further development of the market in accordance with global trends and the internal needs of the economy. An important aspect is the further improvement of the regulatory framework, which will strengthen confidence in the market and create conditions for its further prosperity. Insurance services in this market are offered only by insurance companies. In this regard, based on the analysis of the activities of various companies, various approaches have been identified to assess the level of efficiency of the insurance market, as well as to assess the availability of conditions for the formation of this market and assess their possible impact on the economy of the region. So, for the insurance services market, state regulation of insurance activities is of particular importance, which involves mandatory licensing, to monitor the financial stability of insurance organizations. It is proved that the sustainable development of companies is impossible without including the social component of sustainable development in the investment decision-making process for better risk and profitability management. It is concluded that today the Russian insurance market continues to function in conditions of economic instability and sanctions pressure.

On the issue of classification of agricultural insurance taking into account modern trends in its development

The Russian legislation does not contain the term “agricultural insurance”, however, in modern publications of Russian scientists and practitioners of the insurance business, this term is used as a synonym for the term “farm insurance”. The article explores the question of the identity of these terms, and their content is correlated with the provisions of Russian legislation. This makes it possible to explore the options for classifying varieties of agricultural insurance offered in the publications of Russian authors, as well as to propose other options for classifications. According to the author of the article, the classification of varieties of agricultural insurance based on a systematic approach and a clearly formulated criterion is important for identifying the essential features of new varieties for our country and their positioning in accordance with the provisions of Russian insurance legislation. The classifications proposed in the article made it possible to formulate the definition of the so-called “index-based crop insurance” used abroad. A number of Russian scientists propose to introduce such insurance in our country, but there are open questions related to its compliance with the provisions of Russian insurance legislation, for example, in terms of determining the object of insurance or the type of insurance. The article developed three types of classification of varieties of agricultural insurance: on the basis of a criterion that is used as a confirmation of the fact of the occurrence of an insured event; based on the number of risks against which the insurance contract protects; on the basis of the object in which the insured wealth interests materialized. Positioning of index-based crop insurance in each of the developed classifications made it possible to develop a scientific definition of this type of insurance: index crop insurance is a special insurance mechanism (significantly different from the classical insurance mechanism), within which multi-risk business risk insurance is carried out, that is, the risk of a decrease in income associated with the yield of crops grown for sale, for reasons beyond the control of the agricultural producer.

Страховой рынок России в 2023 году: результаты, риски и прогнозы

The article is devoted to the analysis of the dynamics of the reduction in the number of players in the Russian insurance market from 2011 to 2023. industry standards for dealing with risks. The reasons for the emergence of a number of new insurance companies and the subsequent bankruptcy of some of them are analyzed. The reasons for the refusal of potential founders to open new insurers are considered. The study examined and structured a group of insurers that showed a significant reduction in insurance premiums from 2021 to 2023. In the work, the authors examine in detail insurance companies with foreign capital regarding the prospects for their continued activities in the Russian insurance market. The relationship between a significant drop in insurance premiums and the company’s strategy to curtail its insurance business in Russia is examined. A recommendation is given for using this indicator when making a decision on purchasing an insurance service.

DIGITIZATION AS A FACTOR OF MTPL DEVELOPMENT

This article reveals the concept, essence and significance of compulsory motor third party liability insurance (MTPL). The topic of digitalization is touched upon as a factor in the development of compulsory motor liability insurance and the use of more advanced information technologies in order to simplify the process of carrying out work in insurance activities. The article highlights and describes the characteristic features of compulsory motor liability insurance in Russia and in foreign countries. The idea of introducing digitalization as a factor in the development of compulsory motor third party liability insurance in Russia is substantiated. The article discusses the methods of digitalization in the development of compulsory motor liability insurance, the scheme of its functioning, and also develops new ways of introducing digitalization as a factor in the development of compulsory motor liability insurance. The article also analyzes the features of the development of compulsory motor liability insurance in Russia, the size of insurance premiums and payments by type of insurance. The article substantiates the main problems of the development of digitalization in the auto insurance market (including compulsory motor liability insurance), which were identified in the process of studying scientific articles, information sources and educational literature. Activities are being developed that are aimed at increasing the interest of vehicle owners in complying with traffic rules and accident-free driving through the amount of the insurance premium, which is paid when concluding an MTPL insurance contract.

Применение финансовых инноваций в системе перестраховочной защиты: опыт развитых стран и перспективы для России

The article examines the prospects for the application of financial innovations in the reinsurance protection system in Russia, taking into account global experience. The growing need to modernize the Russian reinsurance market in the context of financial globalization and increased external constraints is noted. The characteristics of the current state of the national reinsurance system are analyzed, key problems and imbalances are identified. It is shown that traditional forms of reinsurance do not reduce systemic risks in the industry, and dependence on foreign capacity is vulnerable to sanctions pressure. The successful experience of developed countries in using innovative reinsurance tools is considered. A set of measures is proposed for the introduction of financial innovations in Russia through the infrastructural reform of the reinsurance system and the establishment of international cooperation. It is concluded that financial innovations have high potential for increasing the sustainability and competitiveness of the Russian insurance sector.

Возможные организационноэкономические схемы индексного страхования в сельском хозяйстве России

Agricultural risks, given climate change and the crisis of globalization, are increasingly considered as national security risks. In global practice, insurance has proven to be one of the most successful and sustainable ways to manage agricultural risks. In the Russian Federation, agricultural insurance is also state-supported, which emphasizes the importance of containment of agricultural sector hazards. However, the level of insurance penetration in Russian agriculture is insufficient. Indices in agricultural insurance, i.e. insurance in which insurance payments are made not on the basis of the assessment of damage to the insurance object, but on the basis of the behavior of a special index, are used in many countries around the world. The main idea of index insurance is that there is no need to establish the fact and calculate the amount of loss, which makes it especially demanded for those activities in the real sector of the economy where speed, transparency and simplicity of insurance payments are important, as well as the need to attract additional well-trained employees to carry out the insurance process and claims settlement. Reduced workload due to the absence of the need to calculate the amount of loss reduces the time required to process claims. The procedures of claim settlement in index insurance can be called the most simplified for the client and the least costly for the insurance company, but the advantages and positive features of index insurance do not end there. The authors have investigated and systematized the possibilities of index insurance, for which they also considered the successful experience of a country with similar socio-cultural codes, Mexico, in the field of agricultural index insurance. The article also suggests ways to overcome the difficulties of index insurance implementation in the Russian insurance realities. The positive features of the index insurance identified by the authors can make it a promising alternative to classical (traditional) insurance, including for the further development of agricultural insurance with state support.

Comparative analysis of sustainable development programs on the example of the international insurance market leaders

In conditions of economic and political instability, as well as natural and climatic changes, special importance is attached to sustainability programs that contribute to the adaptation of humanity to adverse factors. Providers of all segments of the financial market, including insurance, for which ensuring stability is a key task, are implementing ESG principles into their practice. The results of efforts to achieve sustainable development in the environmental, social and business management spheres are reflected in separate registers of reporting, which has been called non–financial. The subject of the research in this article is the analysis of non–financial reporting of the leaders of the international insurance market in order to summarize the experience of creating and implementing ESG principles in insurance. The object of the study is two of the largest insurance groups in the world — AXA and Ping An, each of which has important features: the first owns a wide branch network around the world, the second is the leader in the introduction of modern technologies and digital tools. The results of the study are to identify the most advanced and possible insurance and investment programs for the protection of ecology and human capital on the basis of the introduction of ESG principles into insurance in the Russian insurance market.

Dynamic Maintenance of Solvency of the Russian Insurance Companies: the Evidence from Russian Insurers

The Russian economy is facing sanctions pressure, resulting in weakening business relations with foreign insurers. Medium-sized insurance companies, targeting regional economic entities, play a crucial role in the insurance market. To improve the efficiency of Russian insurance, the number of medium-sized companies operating in regional markets must increase. To regulate their capitalization, special conditions must be developed, focusing on capital adequacy requirements and financial stability parameters. While earlier research has examined what factors might impact profitability growth, the investment income factor in maintaining corporate financial stability has been underexplored. This paper aims toexplore conditions for improving insurers' financial soundness through growth of a company's internal capitalization. Medium-sized insurance companies often struggle to meet regulators' minimum capital requirements (a core variable linked with companies’ capitalization) leading to potential market shrinkage. Our hypothesis is that it possible to create a financial reserve that meets the regulator’s increasing equity requirements without raising additional external investments. This study examined the factors which impacted the growth of medium-sized insurance companies operating in the emerging markets. Operating results of seven randomly selected medium-sized insurance companies in 2014–2022 were used forthe analysis. The paper suggests that institutionalization of insurance companies' capitalization is crucial to minimize the risk of capital inadequacy. The study contributes to our understanding of how medium-sized insurance companies can be governed and suggests a way to increase their capitalization.

Legal Features of the Organization of System of Compulsory Medical Insurance: A Comparative Legal Aspect

The article gives a legal analysis of the current state of the system of compulsory medical insurance in Russia, gives a comparative legal aspect of the CHI systems in Russia and some European countries. A proposal has been formulated on the advisability of providing an opportunity for working citizens to realize their right to choose participation in the CHI system by voluntarily refusing to participate in this system and resolving the issue of paying for medical care and treatment through the voluntary medical insurance system. It is proposed to change the legal status of persons who have no earnings (income) for disrespectful reasons and be insured in the CHI system only in terms of emergency (first aid).

Проблема мошенничества в сфере обязательного страхования автогражданской ответственности в России и регионах

Проблема мошенничества в сфере обязательного страхования автогражданской ответственности в России и регионах

A target model for the Russian insurance market development: Customer-centric transformation and best practices of foreign countries

Subject. This article examines the indicators of the Russian insurance market and the key problems of its functioning. Objectives. The article aims to analyze the indicators of the Russian insurance market for 2005–2022, identify the key problems of its functioning, build a target model of market development based on the practices of foreign insurance markets, develop a set of recommendations to solve the identified problems and assess the potential effectiveness of the proposed measures by forecasting and modeling market performance indicators in the long term as a result of the implementation of the developed recommendations. Methods. For the study, I used a content analysis, correlation and regression analysis, and the expert assessment method. Results. The article finds that the key problems of the Russian insurance market functioning are due to the high level of its operating costs, which is largely a consequence of the dependence of the insurance market on the banking sector. The article proposes certain measures, including legislative reforms aimed at strengthening regulation in the field of consumer protection and regulation of types of insurance, as well as a number of measures for implementation at the level of insurance companies. The article also presents the author-developed forecasting models regarding the transformation of the market by 2027. Conclusions. To improve the efficiency of the Russian insurance market, it is necessary to implement a set of measures for its customer-centric transformation, taking into account the best practices of foreign insurance markets.

Environmental insurance in the mechanism of environmental protection in Russia: how to improve its efficiency with the help of law?

Purpose The purpose of this study is to formulate a proposal to fill the gap in national legislation, which will increase the effectiveness of mandatory environmental insurance. Design/methodology/approach This is a review of scientific doctrine and legislation, which shows the problems and prospects for the development of mandatory environmental insurance on the example of one country. Findings At the moment, environmental insurance in Russia is at the very beginning of its development. Despite the experiments carried out and fragmentary references in the law, there is a classic example of a gap in the law, when the procedure provided for by the norms of law lacks a clear implementation mechanism. To fill this gap and increase the effectiveness of environmental insurance, the authors propose to clearly localize the scope of its operation, fixing the obligation of environmental insurance only for objects that have a significant or moderate negative impact on the environment (objects of categories I and II), provided for by the Federal Law “On mandatory Environmental Protection.” Originality/value A new concept of a mandatory environmental insurance contract is substantiated, which optimizes civil liability for causing harm to the environment, life, health and property of citizens (property of legal entities) as a result of accidents and man-made disasters.

ПЕРСПЕКТИВЫ РАЗВИТИЯ ОБЯЗАТЕЛЬНОГО ПЕНСИОННОГО СТРАХОВАНИЯ В РОССИИ

Article dedicated to pension issues. The ba-sis of pension provision in all countries is the responsibility of generations. That is, those who work now support those who are now retired. Indeed, this is the Bismarckian sys-tem, but it allows the state to carry out its main function – to provide those who can no longer work with the necessary benefits. In this article, the author considers the stages of reforming pension insurance in Russia and presents the possibilities of stable pen-sion provision.

Individual insurance products: is there a real choice for Russians?

The article analyzes the level of competition of insurance product offerings in the following four markets using the Russian market as an example: (1) life insurance, (2) accident and disease insurance, (3) voluntary health insurance and (4) pension insurance. The purpose of the study is to assess competitive dynamics in the insurance product markets during the period under review. Relevant data of the Expert Rating Agency for 2018-2021 were used as the study basis. The study methodology is based on the assessment of the competitive situation using the SV matrix, which is based on HTSV (level of differentiation within the dominant group) and CRSV (cumulative market share of the dominant group). The study shows that the Russian insurance market in 2018-2021 was quite diverse in terms of dominance. Most individual insurance products belong to the B4 quadrant of the SV matrix (a natural oligopoly), yet, the situation with the dominant group regarding types of insurance under study is significantly different, since the number of dominant players varies from 2 to 10, considerably affecting a real consumer choice, however, among the markets under study, there is none with low concentration or without a dominant group or dominant leader. In the VHI market, the choice is quite large, while the presence of a big dominant group of eight companies suggests formation of the two-tier companies. The top echelon sets quality standards and dominates by price, while other companies can compete with the leaders due to niche offerings and price factors. The pension insurance market is an example of a significantly reduced consumer choice: in 2018, it is in the RO quadrant with a relatively “weak” dominant group, while by 2021, a hardly differentiated oligopoly of 5 companies has been formed, controlling 95% of the market. Emerging players with the market and institutional opportunities similar to SOGAZ make significant changes in the market structure, as in the case of personal insurance market, wherein SOGAZ has absorbed the largest player, transferring the market from an oligopoly of seven companies to the actual dominance of the one.