Which insurance companies will leave the market. Car insurance prices can't be held down
MOSCOW, August 8 - RIA Novosti, Natalya Dembinskaya. Over the past few years, insurers have been actively pursuing the liberalization of MTPL tariffs - in essence, this is a transition to free tariff setting, which should allow them to reduce the colossal loss-making in this sector. Some amendments are made to the long-suffering law on compulsory motor liability insurance almost every month.
The Ministry of Finance volunteered to protect car owners. He proposed prohibiting insurers from setting coefficients that increase the cost of a policy, allowing them to sell policies with limits of up to 1-2 million rubles, and selling compulsory motor liability insurance for a period of three years. Experts point out: the proposed innovations only indicate that the industry is in a systemic crisis, drivers will continue to overpay, and insurers will leave the market faster than reduce the cost of the policy. About what is happening with the MTPL market, and whether it is possible to get it out of the vicious circle - in the material of RIA Novosti.
How did “natural OSAGO” turn out?
At the end of April, amendments to the law on compulsory motor liability insurance came into force in Russia, establishing the priority of in-kind compensation over monetary compensation in the event of an insured event. This was one of the key changes advocated by insurers. The players explained that this approach would allow them to cool the ardor of unscrupulous auto lawyers who buy drivers’ rights to claim under MTPL and extort impressive sums from insurance companies.
Defenders of the rights of car owners immediately stated that such an initiative is doubtful for owners of compulsory motor liability insurance: the desire of interested parties to save money threatens them with low quality repairs and spare parts from disassembly sites. The debate about “natural insurance” has not subsided to this day, but less than three months have passed, as it turned out: the transition to natural compensation began to work against insurance companies, only increasing the unprofitability of compulsory motor liability insurance. If last year the market lost 60 billion rubles on mandatory auto insurance, then this year the losses will be even greater, the largest players stated.
Why did the law, on which the industry had pinned great hopes, not live up to expectations and bring new losses?
Forgot about wear and tear
Direct settlement is the right step towards customer-centricity: where you bought the policy, you get it repaired, experts point out. But there is a nuance here - according to the rules, payments between insurers are made taking into account wear and tear, and the natural form of compensation for wear and tear does not imply. In practice it works out like this:
Vasya drove into Alena. Alena is insured by Ingosstrakh, and Vasya is insured by Rosgosstrakh. To receive compensation, Alena applies for a direct settlement to her company, Ingosstrakh. According to RSA standards, Ingosstrakh repairs Alena’s car without taking into account wear and tear (that is, like new), and the defendant’s insurance company, Rosgosstrakh, compensates Ingosstrakh for expenses taking into account the wear and tear of Alena’s car. As a result, Ingosstrakh loses money.
Sad results
Thus, the system in its current form itself motivates insurers to move away from the natural form of compensation, which they themselves seemed to advocate for.
“Large insurers sabotage the “natural” insurance policy and choose to pay in cash. Essentially, nothing has changed, the system does not work, fraudsters continue to cheat, and auto lawyers continue to work for their own pockets,” states Maxim Khanzhin, president of the Association for the Protection of Auto Insurers’ Rights.
In conditions when insurers are leaving the market, losses and the average bill for compulsory motor liability insurance are growing, insurance companies simply cannot lower prices, Khanzhin points out.
Ready foreign experience
Observers consider one of the main mistakes to be the transfer of in-kind compensation to insurance companies - so that they determine the service to which the car owner is sent. The fact is that insurers exert price pressure on services, and the larger the company, the higher it is:
“They tell car repairmen: if you want to get volume, then minus 30% of the unified calculation method (repair cost). As a result, the quality of repairs suffers, car owners are dissatisfied, services go bankrupt. Only insurers are happy,” explains Khanzhin.
It would be much more effective, according to him, to consider foreign experience: to remove responsibility for repairs from insurers and transfer it to self-regulatory organizations (SROs), which would include interested services that meet the requirements of the Ministry of Transport and the Central Bank.
With this approach, the SRO will have the compensation fund, and insurers will not be able to put pressure on the service.
“Only then will everyone be happy, and the market can be liberalized. For now, for now, we need to discipline insurers and tighten control over them,” Khanzhin believes.
Controversial proposals
Observers are reluctant to comment on the new proposals of the Ministry of Finance regarding compulsory motor liability insurance, and differ in their assessments of what the effect of the innovations will be. Disagreement, for example, is caused by the approach that allows the purchase of different amounts of responsibility.
“Obviously, if you live in an urban village, where there are mainly domestic cars, 400 thousand is enough, but if in the capital, where there are expensive cars around, then this is a ridiculous amount,” notes Igor Pushkar, head of the Society for the Protection of Rights consumers in the insurance industry. In his opinion, purchasing policies for a period of more than a year is also a good idea.
RSA fears that the sale of “improved” policies with limits of 1-2 million rubles will cause a new wave of fraud.
“Black” auto lawyers will be able to buy a policy for themselves for 2 million at least every year, and the insurer will not be able to refuse. And the fraudster will pay only three times more than an honest driver,” agrees Mikhail Anokhin, executive director of the Smart Driving Laboratory. He also points out that, for example, a three-year OSAGO policy can encourage unscrupulous players - they will collect the insurance premium for several years and then disappear.
patchwork quilt
Observers compare the law on compulsory motor insurance to a patchwork quilt: some problem arises - changes are immediately made to the law, economically poorly calculated. And later it turns out that what has already been legalized does not solve the problem - the next problem arises, and so on step by step.
Pushkar identifies several reasons why chaos has reigned in the MTPL market. Firstly, initially any company was allowed to enter it, the entry threshold was minimal, and it was very easy to obtain a license.
“As a result, many small companies collected money and left the market, leaving these debts to the Russian Union of Auto Insurers. All these compensation payments seriously hit RSA,” the expert notes.
Another problem was the lack of dialogue between the insurance community and organizations that represent the interests of car owners.
Finally, there is no single regulator in the industry. First it was the Department of Insurance Supervision under the Ministry of Finance, then the Federal Securities Service, and now the Central Bank. Before one regulator has time to understand the practice and essence of the law, some kind of administrative reform takes place, the powers to regulate the insurance industry are already transferred to another regulator, and so on. This ping-pong ultimately leads to a lack of a unified view of the industry.
Vehicle service order
The essence of this document is that insurance companies will receive certain quotas for MTPL sales volumes. If the specified volumes are not met, the right to sell policies will go to competitors, who will be able to enter into contracts with car owners on behalf of the insurers who failed. This situation did not suit all players in this market.
“The need to sell MTPL policies in regions that are problematic clearly changes the companies’ business model. And we see, in fact and according to plan, a decrease in the number of players,” Banki.ru quotes the words Director of the Insurance Market Department of the Bank of Russia Igor Zhuk.
The deadline for signing the agreement is July 25. It turns out that today car owners may encounter problems when purchasing a “car citizen”. Among the dissatisfied are market leaders. Thus, Rosgosstrakh may announce the termination of work with this type of insurance. This company occupies a quarter of the MTPL market, but in recent months it has been reducing activity in this area of business. Analysts believe that Rossgostrakh’s refusal from compulsory motor liability insurance is unlikely, since the company depends on the corresponding revenues, but if this happens, the collapse of the “autocitizen” will not happen - four leading companies are ready to take the share of Rossgostrakh, including RESO-Garantiya ", "Ingosstrakh", VSK, "Alfa Insurance".
The Russian Union of Auto Insurers continues to hope that there will be no “refuseniks” and everyone will sign the agreement by July 25.
“After this period, companies that have not signed the agreement will be subject to fines. The maximum fine is 500 thousand rubles, and a fine of 200 thousand rubles can be imposed on a company that has submitted a package of documents to join the agreement, but has not eliminated certain shortcomings in them, and is delaying the signing of documents,” he told the Interfax agency » President of the All-Russian Union of Insurers Igor Yurgens.
While RSA and insurance companies are sorting out the agreement, the situation with the acquisition of compulsory motor liability insurance policies in the regions is still not changing. This was encountered in the Chelyabinsk region. Contacted us motorist Ilya Lipatnikov.
“It's time to get insurance. Passed the technical inspection and went to the insurance company "YuzhUralAsko". There were almost no people, well, I think I’ll quickly arrange everything, but they told me: “We are accepting people using coupons.” Come in the morning, stand in line and at nine in the morning (whoever has enough time) you will receive a ticket. Okay, I say! Can I get it now, since I’ve arrived, so I don’t have to wait in line at six in the morning? They answered that no, only in the morning,” Ilya wrote in a letter to the editor of the site.
The story didn't end there.
“I arrived in the morning. They issue 19 coupons per day! I ask: who is the last? A woman from Volga called, sign up, she said, all the last ones are here. Enterprising people collect one hundred rubles for keeping a queue according to the list. They pass this baton somehow among themselves, and also manage to make money. The most interesting thing happened later: people come to get coupons in the morning (newbies like me) and bump into people who have been on the list for a long time. Before the fight, they snatch these coupons from the insurance employees when they open them,” continues the indignant car owner.
And here is the photo that Anton Zabolotnikov sent us. So in Chelyabinsk they stand in lines for compulsory motor insurance.
We called the YuzhUralAsko company and tried to purchase mandatory insurance for drivers.
“Come at nine in the morning and get a ticket. You will be accepted with him on the same day,” the insurance company assured.
After contacting our own source at the company, we found out whether it was possible to obtain the coveted policy.
“If you insure in a circle, then you will also be able to issue compulsory motor liability insurance without any problems. There are no queues here. Only OSAGO - then with a coupon. They have a limit and a constant queue. Why is this happening? I don’t know the answer,” said the manager, who wished to hide his name.
Similar problems are observed in the Rostov region, the Republic of Adygea, Nizhnekamsk and other cities of Russia.
Registration of MTPL policies turned into a quest several months ago, and now the situation has escalated to the limit. In federal companies, Krasnoyarsk residents are refused for various reasons: the forms have run out, the driver is under 27 years old, they are accepted only by appointment, and it is better to issue a policy on the Internet and print it out on a regular sheet of paper. But the programs freeze. They also ask insurance companies to write an application according to which the policy will be issued in 30 days. In regional companies such as Nadezhda, meanwhile, the flow of customers has increased 5 times, and in some branches 20 people are waiting in line on the street.
An NGS.NEWS correspondent went to the Nadezhda office on the street. Paris Commune. People only go outside here to smoke, but in the building itself the author counted more than 25 drivers. In line, they vying with each other to share their sore points:
- Many [seeing the line] turned around and left. And we called all over the city, everything that was on the Internet was Rosgosstrakh, VSK... Either there is not enough experience, or the driver is not 27 years old, says the guy who came with two girls.
- Yes, Rosgosstrakh stopped providing insurance altogether. At Soglasiya they told me: “You don’t have to come in at all for a couple of days.” There’s a queue there too,” a man with a helmet in his hands enters into dialogue.
- Some say that they refuse to insure on numbers from another region - here I have Kemerovo ones. Let's see...
- I have a VAZ 1978. We were at Sibirsky Spas and RESO - both on Baturin. In the first one they said that either the license was taken away or something. In the second queue you can’t see, but the girl said that “everything is by appointment, there are a lot of people, and we work until five - you won’t have time.” Recommended on the Internet. Why don't I register? No, then some shit will work out,” says a sporty guy in a cap and shorts.
To receive such a flow from the “federals,” Nadezhda introduced a night shift for some of its employees, says company representative Natalya Khudyakova: “We have all the windows working, all staff resources are involved, some were transferred to the night shift to sort mail. This is not a normal situation. We take the brunt of the blow upon ourselves.” The drivers surveyed left the office after a maximum of an hour. They do not refuse clients here, but they call compulsory motor liability insurance “social insurance”, which is unprofitable for the company. The company survives, she emphasizes, through voluntary life and health insurance and housing.
“If they [clients] were sent to another office, they have the right to complain to the Central Bank,” the interlocutor advises and addresses the drivers. - Do not be silent. There’s no need to come to our office and swear, thinking that we have some kind of conspiracy, that people are being redirected to us.”
Under the guise of clients, we called the offices of federal insurance companies and heard approximately the same words that drivers quote: “there are no forms,” “come, let’s look at your documents.” The insurance bureau "OSAGO 124" stated that large companies have now suspended work with them. "We can only offer Sibirsky Spas."
New OSAGO policy
We tried to find out what was happening in the market from the Rosgosstrakh company, which was most often mentioned by the drivers surveyed. The answer to the letter from the Moscow press service came half an hour later. They stated: they are not responsible for colleagues in the Krasnoyarsk market, and “the implementation of MTPL agreements in the company is carried out in strict accordance with the norms of the current legislation and the requirements of the mega-regulator.”
“If you are aware of any specific cases of violations, please report them: which of the employees/agents, in which office, what program and at what time on our company’s website, as you put it, “gives a technical glitch” - we will look into it ", promised Rosgosstrakh.
The only way to force a company to issue a policy, says the head of the Avtojurist company, Evgeniy Nigmatulin, is to write a statement asking to do so. Additionally, you can indicate where and when the car can be inspected. But the law, as previously stated in Rosgosstrakh, gives insurers 30 days to do this. The lawyer is skeptical about the failure when registering an electronic policy on company portals and suggests recalling how registration on the government services portal took place when sending a letter by Russian Post - “all in the best traditions.”
At the same time, Evgeny Nigmatulin connects the current situation with recent amendments to the law on the predominance of natural compensation for road accidents over monetary compensation. We wrote earlier how this will happen and who will benefit.
For refusal to issue compulsory motor liability insurance, companies face a fine of 20 thousand to 300 thousand rubles.
Insurance companies, according to the interlocutor, were not ready for the “crude” law, “disgusting from an administrative point of view.” Since the start of the amendments, on April 28, he has not heard of a single case where a car was sent for repairs after an accident, and money was not given for the damage. “I know 100% that 1.5 months ago several large insurers, which together cover 80–90% of the market, did not have an agreement with any service. I talked to my colleagues for another six months: it won’t take root - as they paid in money, so it will be - the old fashioned way.”
However, lawyers have differing opinions about the reasons for the collapse in the market. Stanislav Savchuk, chairman of the regional society for the protection of the rights of car owners, sees the reason for this behavior of large players in the internal policies of companies, but not in replacing payments with repairs. According to him, the Union of Auto Insurers obliges each company to maintain the same percentage of the market in all regions. But there are “acid” ones, i.e. unprofitable regions (there are about 10 of them in the country), where the “federals” are now trying to sell less. Therefore, we are forced to reduce sales in a similar manner in average cities, which includes Krasnoyarsk. The shipment of forms, says the lawyer, is based on these statistics.
Meanwhile, as the NGS.NOVOSTI correspondent was assured by the Central Bank, in the first quarter of this year, Siberians complained to the regulator more than 2 thousand times about the incorrect work of insurers. This includes the refusal to conclude an agreement and the imposition of additional services.
The Central Bank puts an end to the right to refuse: insurers do not have the right to do this, since the MTPL agreement is public. For this, ordinary workers may face a fine of 20–50 thousand rubles, and for officials and companies - from 100 thousand to 300 thousand rubles. The problem was supposed to be solved by an electronic policy issued on the official websites of companies - the possibility was introduced on January 1, 2017. You can check false insurers on the portals of the Central Bank or autoins.ru. Over the five months of this year, residents of the Krasnoyarsk Territory have already issued 39 thousand OSAGO policies via the Internet, the regulator says. However, drivers complain about the inability to do this.
The Central Bank asks you to report problems with registration to the insurer's call center and supervisory authorities: “If there are problems with the accessibility of the site - it constantly hangs - then you need to contact the Bank of Russia. The easiest way to do this is through the online reception. It is necessary to attach a screenshot of the screen recording the date and time of access to the site as evidence.”
Imposing life insurance can also cost companies 300 thousand rubles. “However, the imposition of insurance must be distinguished from so-called cross-selling or box sales,” the Central Bank emphasizes. - These are generally accepted practices when, when purchasing a compulsory motor liability insurance policy, a person is introduced to the most popular voluntary insurance products and offered to purchase them. However, this must happen without any coercion."
Revoked the license for compulsory motor liability insurance of the insurance company " "; The decision was made in connection with the insurer’s voluntary refusal to work with compulsory motor liability insurance. Earlier, in 2015, the Russian Insurance Center refused MTPL, and in March of this year, the St. Petersburg Regional Insurance Company returned its license to the Central Bank. According to forecasts, if the loss ratio of MTPL in the regions increases, other insurers will leave the market, and the remaining ones will reduce their portfolios in the segment.
According to a member of the board of IC Alliance and IC Alliance Life, Allianz management has been planning to leave the OSAGO market since 2014 - then a new company strategy was adopted, which included reducing its presence in retail. Then, from December 2014 to December 2015, Alliance suspended sales of MTPL, but the license for this type of insurance was not revoked. “We have returned to the careful, attentive sale of policies since December 2015, but in July of this year, after analyzing the situation, the board of directors made the final decision that we are beginning the procedure for returning the license to the Central Bank,” Dubensky said.
Before the decision to leave the Alliance segment, for many years it was among the top 10 insurers in terms of MTPL collections. The company's annual collections in this segment before the crisis in the Russian Federation as a whole averaged about 3 billion rubles; at the end of 2013, the company collected 5 billion rubles. In St. Petersburg, Alliance also did not leave the top 10 for compulsory motor liability insurance, collecting 100-200 million rubles in premiums annually. For 6 months of this year, after the suspension and reduction of business in the segment, the company collected only 117 thousand rubles under compulsory motor insurance in St. Petersburg and 4 million rubles throughout the country.
Part of the existing policies of Alliance, which remained after the reduction of business, together with the existing obligations under previously sold policies, have already been transferred to the insurance company Medexpress (part of the Allianz group of companies in Russia and specializing in health insurance). Medexpress will settle the losses that have been stretching across this portfolio since previous years; their size is not disclosed by Alliance. Medexpress does not plan to expand sales of MTPL policies, Dubensky clarified.
The crisis is not going away
The main reason for Alliance's decision to leave the MTPL market was the new rules for working in the auto insurance market, which oblige insurers to work in all regions of the country, as well as the mandatory sale of electronic policies from January 1, 2017.
In July, all insurers were required to join the RSA Single Agent system, launched by the Russian Union of Auto Insurers. Under this system, companies that have branches in a certain region can now sell not only their own policies, but also enter into contracts on behalf of other MTPL insurers. Insurers do not benefit from massive sales in problem regions, where loss ratios sometimes reach 200-300%.
Hope for reform
The hope for stabilizing the situation on the compulsory motor insurance market was the amendments on compensation in kind, which will come into force in July 2017. Insurers will themselves choose the form of compensation for each victim: cash payment or repairs at a service station (STO), and will also enter into agreements with the stations and constantly cooperate with them. The Ministry of Finance, which developed the project, expects that over 90% of insurance cases in MTPL will be settled by repairs.
Compensation in kind for losses in compulsory motor liability insurance will block the opportunities for auto lawyers to repurchase the right to claim payments and receive for the victim amounts that are many times greater than the damage, and thus will at least slow down negative processes, says Igor Lagutkin, director of the company's branch in St. Petersburg and the Leningrad region. At the same time, he expects further reform of the market. “The problems of compulsory motor vehicle liability insurance require the close attention of all government organizations, including regional leadership, law enforcement agencies, and the judiciary. Their joint efforts should be aimed at a real fight against auto-legalism, and not at including their region in the list of the “Single Agent of the RSA,” he noted.
“If the increase in tariffs is not accompanied by a mechanism for in-kind compensation, then it will never be able to cover the losses created by car lawyers,” assessed Yuri Nekhaychuk, a representative of ““. “An electronic policy in OSAGO will eliminate the issue of a shortage of policies in regions that are faced with this difficulty, and in-kind repairs will improve the quality of services and will not allow gray auto lawyers to unfairly enrich themselves from other people’s accidents. Further reform of OSAGO and its timing will depend solely on the regulator and legislative bodies Russian Federation," he added.
In St. Petersburg, the situation is certainly better than in a number of cities, but still, in general, the situation with compulsory motor liability insurance remains quite difficult, assessed Sergei Demidov, managing director of the motor vehicle insurance department. In the first half of the year, MTPL collections in St. Petersburg, due to rising tariffs, increased by 20%, to 7.1 billion rubles; payments for the same period increased by 38%, to 4.5 billion rubles. In Russia as a whole, over six months, collections increased by 21%, to 113 billion rubles, and payments - by 40%, to 77.5 billion rubles. The final financial consequences can only be assessed next year, but it is already obvious that the situation is not the best, added Artem Yakovlev, head of the department for working with insurance intermediaries of the "" branch in St. Petersburg. According to him, Ingosstrakh also hopes for coordinated actions by insurers, the Central Bank and the government.
Select the fragment with the error text and press Ctrl+Enter
The price of car insurance policies increases every year, but insurers continue to complain about losses and are leaving the market en masse. Regulators are constantly carrying out reforms that, in theory, should make tariff schedules more logical and fair. In the near future, the Central Bank will again change tariffs for compulsory motor liability insurance. “Money” understood the causes and consequences of reforms.
Ivan Ananyev
Since June 2018, the limit of payments for road accidents registered using the European protocol in the regions of Russia has increased from 50 thousand to 100 thousand rubles. (in Moscow, St. Petersburg and the regions it has long been 400 thousand rubles). Drivers were given the formal opportunity to independently file an accident using a special application, even if the parties do not agree with the assessment of the circumstances of the accident.
Almost immediately after this, the Central Bank published a draft of the next MTPL reform with a change in basic tariffs and adjustments to coefficients, due to which the cost of policies could immediately increase by 20%. However, some categories of drivers, on the contrary, will receive relief. All these changes are taking place during a period of aggravation of problems in compulsory motor liability insurance, when the unprofitability of insurance has reached a critical point. The system is preparing for the most serious reforms in the entire history of its existence.
Why insurers are leaving
The Russian Union of Auto Insurers (RUA) claims that despite rising prices, OSAGO remains unprofitable. “The average payment continues to grow, and the average cost of an MTPL contract and the volume of premiums collected by insurers went negative for the first time last year,” said RSA President Igor Yurgens. According to the organization, now the average cost of a policy is 5.8 thousand rubles. versus 6.6 thousand rubles. a year earlier. At the same time, the average payment for the year increased by 15% and reached 77 thousand rubles. According to RSA statistics, the payout ratio for compulsory motor liability insurance is now 118% of collected premiums. Accordingly, the losses of insurance companies are estimated at tens of billions of rubles. “The loss ratio for MTPL in 2017 reached its maximum, insurers received 15 billion rubles in losses. If in Moscow the average loss ratio for MTPL is 95-105%, then in the regions it is from 120% and higher,” calculated the CEO of Mains Insurance Brokers & Consultants Sergey Khudyakov.
Due to rising prices, many car owners have abandoned the purchase of compulsory motor liability insurance altogether, preferring to occasionally pay fines. According to Mains Insurance Brokers & Consultants, in 2017 the number of fines for driving without an MTPL insurance policy increased by 40%. Expensive MTPL policies have forced clients to refuse comprehensive insurance, notes Dmitry Belov from Auto Special Center: “The increased payment amount guarantees car repairs without additional proceedings. Drivers began to neglect comprehensive insurance, counting on their experience and innocence.”
“Insurers complain about many types of fraud in this area and practically cannot do anything about it,” says Valery Kolyada, a representative of the online aggregator strahovkaru.ru. “The MTPL market is flooded with counterfeits, and we can talk about either direct deception of the buyer or the open sale of illegitimate forms, when the client deliberately buys a cheap, invalid policy for traffic police officers. People resort to forgery because they cannot afford a real policy due to high cost,” complains Nikolai Tyurnikov, head of the law firm Glavstrakhkontrol. RSA counted several million fakes and hundreds of fraudulent sites.
Another reason for losses is the increase in insurance fraud. After the total payment limit was increased to 500 thousand rubles, the number of crimes in the field of compulsory motor liability insurance increased by 159%, they say in the RSA, citing data from the Prosecutor General's Office. In a year, scammers receive from 20 billion to 40 billion rubles. The most problematic regions are Adygea, Rostov and Volgograd, where the average payment reaches 180 thousand rubles. In 14 regions at once, the average payment exceeds 100 thousand rubles.
For the same reason, insurers have stopped offering voluntary civil liability insurance (VLT), which was literally forced on policyholders a few years ago. Nikolai Tyurnikov confirms: almost none of the insurance companies work with voluntary auto citizens. For example, Rosgosstrakh, RESO-Garantiya and Renaissance do not sell DGO policies at all, while AlfaStrakhovanie and Ingosstrakh are ready to issue an extension of OSAGO only to reliable own clients, complete with a comprehensive insurance policy and a limitation of liability in the amount of 500 thousand. up to 1.5 million rubles.
The unprofitability of compulsory motor liability insurance and the activities of motor vehicle lawyers, who through the courts force companies to pay large sums, forces many insurers to abandon motor vehicle insurance altogether. Over the past two years, VTB Insurance, Uralsib, Alliance, Intach-Insurance, Bin-Insurance, IC Trust, Rossiya, Rosstrakh, Russian Insurance Company and other. Another 24 companies had their licenses forcibly revoked in 2017. “In total, about a hundred companies left the market,” states Valery Kolyada. “The obligations of the refuseniks have to be borne by the remaining players, which does not help improve the market,” adds Sergei Khudyakov.
The most unprofitable regions according to OSAGO (2017)
|
Source: RSA.
What do the reforms change?
OSAGO is reformed every year, but problems remain for both companies and their clients. Over the past few years, a unified methodology for calculating the amount of payments and direct compensation for damage have been introduced, when the victim must contact his insurance company, and not the company of the culprit. A mandatory European protocol has appeared for registration of simple road accidents without calling the traffic police. To solve problems of availability of policies in the regions, insurers were required to launch online sales services. Finally, regulators began a gradual process of tariff liberalization by introducing a base rate corridor.
However, the policies did not become cheaper. Managing Director of the Auto Insurance Department of the Renaissance Group, Sergei Demidov, explains that when choosing a base tariff, insurers most often rely on the level of unprofitability of a particular region or city. “In practice, the lower price range cannot ensure profitability, so insurers use the upper threshold,” says Sergey Khudyakov. Leading lawyer of the European Legal Service Orest Matsala has no doubt that the choice of the maximum tariff is absolutely legal. Moreover, clients, according to him, are rarely indignant: “Due to known problems with registration of compulsory motor liability insurance, many agree to any conditions just to get a policy.”
The last increase in basic MTPL tariffs occurred in 2015, when the Central Bank raised the rate by 40-60% and expanded the tariff corridor to RUB 3,432-4,118. At the same time, payment limits also increased from 120-160 thousand to 400-500 thousand rubles. The tariff increase then was also explained by the unprofitability of the business, recalls Sergei Khudyakov. The unified methodology for calculating the cost of repairs also led to an increase in the costs of insurance companies, adds Dmitry Belov, director of sales of financial services of the Autospetscenter Group of Companies.
The Central Bank is planning the next change in tariffs, presumably, from September 2018, when both base rates and coefficients will be changed again. If now the base rate varies from 3432 rubles. up to 4118 rubles, then from September the corridor will become wider: from 2746 rubles. up to 4942 rubles, that is, all other things being equal, the cost of the policy may increase by 20%. Policies will become cheaper only for drivers of two-wheeled vehicles and cars of legal entities, since for them the upper limit of the tariff has been reduced by 10.9% and 5.7%, respectively.
Accident rates (bonus-malus) are now proposed to be tied only to the driver and calculated every calendar year, and not for the duration of the previous policy. This will avoid confusion in cases where a driver has several different coefficients for different cars in the RSA databases. On January 1, 2019, they will be assigned the lowest available KBM. And legal entities will receive a single coefficient for all cars in their fleet.
The dependence on length of service and age is also planned to be retained, but instead of the current four options, a whole matrix of coefficients will appear, the size of which will depend on one of seven age ranges and eight driving experience ranges. For experienced mature drivers, the coefficients will be reduced to 0.96; for young and inexperienced drivers, on the contrary, they will be increased to 1.87, that is, by 4.5%. Previously, the Ministry of Finance proposed linking the bonus-malus to the driver’s accident history, as well as introducing a grid of increasing coefficients for persistent traffic violators.
How prices will rise
Senior analyst at the Alpari investment company Roman Tkachuk believes that after all the changes, the cost of the policy for novice drivers may increase by 60-80%. Representative of the aggregator strahovkaru.ru Valery Kolyada predicts the greatest growth in “toxic” regions where insurers’ losses are high.
“It is possible that online intermediaries, who still have the right to act as aggregators, will also be able to sell policies on their own,” says Valery Kolyada. In his opinion, with their help, the Central Bank hopes to solve problems with the availability of electronic policies in the regions. The share of online sales is already growing rapidly and in the first quarter of 2018 exceeded 40%, which is four times more than in 2017, according to Sergei Demidov from Renaissance Insurance. The planned changes are another step towards the liberalization of MTPL tariffs, the expert assures. In the future, insurers will deal with payment issues, and the state will stop regulating tariffs. RSA is confident that market schemes will be beneficial to everyone, and tariffs will become fairer. At the same time, it is proposed to cancel the coefficients of territory, age and length of service, restrictions on age, power and use with a trailer in the RCA, allowing insurers to independently negotiate with clients.
Using the experience of European countries as an example, Igor Yurgens expects a slight increase in prices (by 10-15%) at the first stage and a quick rollback to lower tariffs as a result of direct competition among insurers. The competitive struggle for the client, according to the president of RSA, will lead to the emergence of more flexible offers, especially for clients with a good reputation: “Insurance companies, on the one hand, will be able to offer the most interesting rates for accident-free and careful clients, and for those who drive aggressively, will offer other conditions,” says the expert. Sergei Khudyakov also expects fairer prices: “After full liberalization of the market, the desire not to overpay for compulsory motor liability insurance will force drivers to drive more carefully with fewer violations.”
“For now, in order to attract customers, companies can only offer additional services and services, as well as develop mobile applications, but the key factor remains the ease of receiving payments,” says Sergei Khudyakov. “After the introduction of direct settlement and in-kind compensation, a significant part of clients, when choosing an insurance company, focuses primarily on the quality of claims settlement, reviews of the company and the level of its service,” adds Sergey Demidov.
“Insurance companies’ focus on voluntary insurance has not worked,” says Roman Tkachuk. “Most drivers are limited to compulsory insurance. OSAGO continues to be the main car insurance product. To reduce their own risks, companies will continue to raise the cost of OSAGO.”