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"Investment life insurance will remain the fastest growing market"

Why banks retain the status of the main sales channel for investment life insurance, what are the fourth generation policies, Oleg Volyanik, CEO of the insurance company "VSK-Life Line" told RBC+.
"Investment life insurance will remain the fastest growing market"

- Over recent years the investment life insurance (ILI) has shown an impressive increase in premium. According to forecasts this growth will slow down. What is your opinion on that?

- I am positive that a significant growth will continue, though not at the same pace as before. This niche has not been filled, but now the market has stabilized. Most likely, the organic growth will follow on the back of a changing competitive environment in the customers’ savings and investments. According to our forecast, the annual market growth will be 25-30%. This will still be the fastest growing insurance segment, the share of which will reach 45-50% within five years, and 70-80% - in the long term, as in the western markets.

- The market growth is achieved due to the activity of banks offering investment life insurance. How can we expand sales channels?

- Banks will remain the main channel for sales of the ILI primarily because they see the client's assets, and the client is used to trusting the bank. Our products are an alternative to deposits and investment products. Besides, we have already begun to expand sales channels: insurers can directly offer their products through their own customer base.

- What are the products of the fourth generation in the investment life insurance?

- Products of the first generations were built on investments in mutual funds, various futures, that is, in basic assets. All the latest products of the third and fourth generations are structured already taking into account the option part; the profitability we receive from the purchased options from the investment bank, we fully give to the client.

- How important is it to increase the transparency of information, considering the fact that ILI remains a complex product for many insurers?

- This is one of the most important issues today. The insurance community has a unified position with supervision represented by the Central Bank, which seeks to make the investment life insurance market as honest and transparent as possible. Just a few days ago, the Single Standard for the life insurance contract conclusion of was approved, which should be implemented by January, 2019. But we are not waiting for this date and already executing its requirements. All the essential elements should be specified in a special memo to the contract, so that the client immediately sees all the difficult moments. Simultaneously, it is necessary to increase the financial literacy of the population.

- What new directions for the life insurance development in Russia do you see?

- In the nearest future we expect a regulatory base for the introduction of equity life insurance developed in the West to be prepared. This will allow customers structure their products on their own, and change the direction of their investments. The entire risk remains on the client though, while in the traditional ILI the insurer guarantees a return of capital.

Another direction is the pension system reform, which the insurers are not involved in yet. We hear proposals to leave the payment of accumulated pensions for the insurance companies, but we are not interested in being only payment operators. We want to be with the client from the very moment when he chooses a way of worthy provision of old age.

In fact, life insurance is really important to develop, because the products of investment and universal life insurance form the sources of long-term investment for the state, especially at a time when the access to the western financial markets is limited.


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