“In the near future, a single standard will emerge, which will include both instructions from the Bank of Russia and ARIA standards. Thus, when buying a life insurance policy, the client will be informed on the standards consolidated with the regulator and industry,” said Maxim Chernin, the Chairman of the Accident Insurance and Life Insurance Development Committee of the All-Russian Union of Insurers (ARIA), during the congress.
According to him, the life insurance market growth in 2018 in Russia showed the maximum over 10 years and amounted to 38%. The volume of insurance premiums increased from 330 to 452.4 billion rubles. The Russian life insurance market showed one of the highest growth rates in the world and amounted to 36.5%. The market volume on classic universal life insurance programs grew by half in 2018.
Experts note the credit life insurance development and the growing interest of Russians to universal life insurance.
“In 2018, sales of universal life insurance products grew quarterly by 12-14%, the share of contributions for the term of 5 to 10 years increased, and the share of short-term policies, on the contrary, decreased, - said Maxim Chernin. - In addition to "pension" goals, universal life insurance is used to save up for children’s education, purchase of an apartment (house). Endowment combines risk coverage, financial protection, and there is an opportunity to get a tax deduction.”
Meanwhile, Ilya Smirnov, the Deputy Director of the Insurance Market Department of the Bank of Russia, predicts the emergence of complex products on the market: "At some point, insurance can offer a comprehensive product that will allow not only bring investments, but also insure against accidents, solve health problems ... In this case, the client will not have to contact different managers separately, fill out a bunch of papers, or have separate applications on the smartphone. The future, in my opinion, is in a complex product that includes investment and insurance components.”
Maxim Danilov, the Life Insurance Vice President of ARIA, reminded about a growing social role of insurance. It is this quality that allows insurers to become allies of the state in caring for citizens, he noted.
“Life insurance has always been one of the foundations for the stability of a welfare state — both in the Soviet era and now. The world and Soviet experience of long-term insurance are convincing evidence of this. Being an instrument for long-term savings, life insurance is still inferior in its attractiveness to citizens in terms of preferential taxation and guaranteeing the safety of personal investments from the state, said Maxim Danilov. - In this regard, it would be logical, in our opinion, to consider the possibility of ensuring parity terms for equal competition of financial instruments of long-term accumulation. This is necessary not so much for insurance companies, but for people, consumers of financial services, in order to fully ensure well-being in the long run.”
According to experts at the congress, accumulative and investment life insurance is developing thanks to increased tax reliefs in many developed countries. Life insurers around the world are the largest national debt holders, says Alexey Rudenko, the General Director of Insurance Company Rosgosstrakh Life, LLC.
“In 2018, life insurers have bought 250 billion of the national debt, in total it is about 10% of the government debt, and this amount is constantly growing,” Aleksey Rudenko said. - In this context, insurance is very different from medical or educational expenses, since these types of expenses are taxes that have not been received by the state. And life insurance is, on the one hand, the state taxes that have not been fully received, and on the other hand, debt financing acquired. In this situation, when disposable incomes of the population are falling, the life insurance stimulation is a rather unique tool that provides expenditure redistribution from a tax to debt load.”
Photos are from open sources.