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Payments on life insurance policies are growing in Russia

Due to the completion of three-year investment life insurance (ILI) contracts, the total payments of insurers have spiked by 59% (up to 90 billion rubles) in the 1st HY 2020, writes the Insurance News Agency.
Payments on life insurance policies are growing in Russia

Investment life insurance in the first half of 2020 brought only 81.4 billion rubles to insurers; the payments amounted to 67.9 billion rubles. 86.5 billion rubles were collected on ILI in the same period of 2019. The insurers collected 60.8 billion rubles on endowment; the payments amounted to 12 billion rubles.

The fees of Sberbank Life Insurance fell by 40.3% (from 77.6 billion to 46.3 billion rubles). The company's products are not presented in remote channels; the main channel is Sberbank branches. “Thus, for about three months, the sales of life insurance products have been actually still. Starting from June we have gradually reached pre-quarantine sales volumes. As of October 22, they (life insurance products - ASN) became available in Sberbank Online (mobile application - ASN), which would become a driver of business growth,” they explained in IC Sberbank Life Insurance.

The temporary "paralysis" of the banking channel caused a drop in sales of JSC Russian Standard Insurance. However, “already in May and June we saw the effect of deferred demand and a recovery in sales (+130% in May compared to April, +54% in June compared to May),” the insurer informed.

The pandemic did not stop 13 life insurers (out of 30) from increasing their fees.

Endowment has turned from a “poor cousin” of ILI into the market driving force. The endowment products will be acquiring new services and options. The hybrids of endowment and ILI will develop, they will take the best of the "two worlds," says Valery Smirnov, CFO, the Board member of Rosgosstrakh Life IC. Universal life insurance policies accounted for 43% of the existing agreements of Rosgosstrakh Life.

ILI also has growing points, expansion of available strategies, ILI with regular contributions for people who do not yet have savings, but have regular income, said Valery Smirnov.

According to the president of Metlife in Russia Georgios Dimitriou, endowment is one of the main products for MetLife.

ILI continues to be the key for Ingosstrakh-Life. The endowment line is developing primarily for the agent channel, new solutions for agents are being tested, said Vladimir Chernikov, General Director of IC Ingosstrakh-Life.

ILI remains the source of the largest fees for IC Russky Standard Strakhhovanie. “ILI is experiencing a “growth crisis” today, the consequences of too rapid development of sales and insufficient understanding by customers of the essence of the product. In order to increase the interest of customers, insurers improve the product, improve its conditions,” the noted in the company.

The main buyers of endowment from AlfaStrakhovanie-Life are women aged 45-54 years. Male clients are younger, 35-54 on average. About 40% of clients earn 35-75 thousand rubles per month, every tenth insured lives in Moscow.

70% of the Renaissance Life customers in universal life insurance are women. The average age of clients is from 40 to 50 years.

According to the Capital Life statistics, the owners of endowment programs are mainly women (more than 71%), more often with children. About 50% of endowment contracts are concluded by clients aged 32-47 years. The majority of endowment clients are professionals: more than 58% of them (doctors, teachers, engineers, trade workers, lawyers, etc.). Another 15% is accounted for by blue-collar occupations, about a quarter - managers of various levels, entrepreneurs and businessmen, they noted in Capital Life.

Most of Rosgosstrakh Life's endowment clients are family people aged 39-45. The average annual premium on these contracts in 2019 was about 50 thousand rubles.

Most Metlife’s clients are aged 35 to 50 with a monthly income from 35 thousand rubles in small towns and from 50-65 thousand rubles in cities ща over one million.

The buyers of endowment program from Ingosstrakh-Life are mostly people over 40 years old with families.

The residents of large cities aged 50 are the main clients of Russian Standard Insurance.

People aged 40-65 with an income of 40 thousand rubles per month are the main buyers of the Soglasiye-Vita policies.


Photos are from open sources.

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