In the first half of the year, the volume of premiums on investment life insurance (ILI) amounted to 88 billion rubles was counted in "Expert RA". Compared to the same period in 2016, the segment doubled. In addition to the continued reduction in deposit rates, the rapid growth of ILI is facilitated by the active promotion of policies by banks. Credit organizations willingly "share" the deposit base with insurers, offering their clients to purchase policies of the ILI.
"Another incentive for banks to sell the ILI is that part of the monetary funds of clients that are received in payment for the policy are placed on deposit in the same bank, but without the need for mandatory deductions by the credit institution to the DIA fund, as in the case of deposit agreements with individuals" said Olga Skuratova, director of insurance and investment ratings at "Expert RA", therefore, according to her, there is no competition with deposits for ILI, but the policies successfully compete with investments in mutual investment funds and funds with trust management, added the expert: at its core ILI is similar with exactly these types of investments in many respects.
The invested funds are not divisible by divorce, and the client can file a tax deduction
Unlike other investment tools for ILI, insurance companies guarantee the client a 100 percent return of funds invested, as well as potentially high investment income. "Our products are affordable because they allow investing funds from 30 thousand rubles in those tools that were previously available only to customers with investment amounts of 20-30 million rubles. In addition, the funds invested in the ILI are not confiscated, divide when divorced, also the client can file a tax deduction in case of a 5 years contract", - general director of "URALSIB Insurance" and "URALSIB Life" Maria Malkovskaya lists the benefits.
The policy of the ILI costs on average 50 thousand rubles, or 1 thousand dollars, said the head of the investment unit "RGS Life" Alexei Salashchenko. In "Sberbank Life Insurance" the minimum contribution is 100 thousand rubles. "The average check for the product is 400-500 thousand rubles - this amount is quite relevant to feel the work of the investment strategy," said Sergei Yegorov, head of the investment products department at Sberbank Life Insurance.
According to the insurers, the investor in the ILI is able to see which instruments his money is invested in. "We provide the client with a very transparent investment declaration, in which the tools and all their parameters are indicated, as well as the formula for calculating additional investment income, while the company's website publishes profitability graphs of all the instruments included in the strategy", Maria Malkovskaya said. According to Aleksei Salashchenko, investment income is in most cases tied to a public asset, so that the client has the opportunity at any time to independently calculate his income. "Accurate information on the state of the account is available online in the customer's individual office on the insurance company's website", he added.
Sergei Yegorov also said that the client necessarily signs an investment declaration, which discloses the investment asset, the formula of profitability, and the risks that the client bears on the investment strategy. "Moreover, after the acquisition of the program, there is a so-called welcome call - the bank's employees must once again make sure that the customers are properly informed of the advantages and risks of the product.
Part of the ILI products involves obtaining a fixed profitability - in this case, the client can expect to receive not only an insurance premium, but also a predetermined income at the end of the investment term. "Such products can be used as a supplement to the pension plan or for the accumulation of a certain amount in the future", believes Alexei Salashchenko. ILI can be used as an alternative to investing in shares, since it gives the insured the opportunity to participate in the growth of a particular stock. "The key goal of the client acquiring the ILI policy is to receive a potentially higher income than deposits, but without the risk of losing funds", said Maria Malkovskaya. "This is a good opportunity to diversify its portfolio". The use of the ILI as an addition to the pension plan or as an instrument of accumulation of funds will still be wrong, she believes.
It is interesting to compare ILI with products of the trust management market, said Sergey Yegorov. There is an opportunity to receive a high income with the growth of the market, but there is no guarantee of a full refund. He named the additional advantages of the ILI as the availability of insurance protection against an accident, legal protection of investments, allowing, for example, to transfer capital appropriately, inheritance, tax deduction. It is 13 percent of the insurance premium, but the maximum contribution amount from which you can get a deduction is limited to 120 thousand rubles. The privilege on profitability allows you not to pay taxes on insurance payments.
The main risk is the absence of guarantees of payments in the event of bankruptcy of the insurance company or revocation of its license
The owner of the policy can earn in the international capital markets, choose between different strategies. "For example, it is possible to participate in the growth of the value of the global bond market or high-tech stock market," says Sergei Yegorov, "This will make it possible to get profitability close to the most basic asset as a result of the contract". Or you can get a regular income in case of a certain scenario. For example, if the shares of the three largest pharmaceutical international companies for the next anniversary of the contract are not lower than the entry point, the client receives a fixed income. "In this sense, we can say that the product is an alternative to the deposit", Yegorov adds, "However, the interest rate is fixed in the deposit, and the rate is potentially higher in the deposit than in the deposit, but depends on market conditions.
Maria Malkovskaya called the bank deposit the main competitor for investment insurance. "The client has already got used to this tool and understands how it works", the expert explained. "In addition, clients have recently shown interest in mutual investment funds and unit accounts, which can also be called competitors of the ILI". Market participants advise to pay attention to the product that you are selling. Often banks do not make it clear that the ILI is not a complete analogue of the deposit, so all risks must be taken into account. The main one is the lack of guarantees of payments in the event of bankruptcy of the insurance company or revocation of its license. Under the law, the insurer must terminate the contract with the refund of the funds deposited. However, if he did not, you can get money only through a general register of creditors.
"Since the level of yield on ILI policies cannot be guaranteed, after the expiration of the contract the client can receive some income or not receive income at all". In our opinion, this is the main risk for both the client acquiring the ILI policy and for further development of the segment of investment life insurance", - said Olga Skuratova. The turning point, according to her, could be already 2018, when the mass payments under the ILI contracts that were concluded 2-3 years ago will begin. Satisfaction of clients with the level of profitability after the end of the contracts will be a key factor determining the future of the segment of investment life insurance and its dynamics. The Bank of Russia believes that in the near future the potential for development of investment life insurance can be exhausted. In the report of the regulator, it is noted that now the main consumers of ILI services are sufficiently wealthy citizens, however this consumer segment is already largely saturated with the products offered. Simultaneously, when selling products with a "low entry threshold", the risk of misleading customers about its main characteristics increases, they pay attention to the Central Bank. The risk that the client expects an insurance product that does not meet its actual content, the regulator calls the main negative factor that threatens the further development of life insurance.
The Bank of Russia assumes elimination of shortcomings in disclosing information by life insurers and minimization of the possibility of misunderstanding by insurers and beneficiaries of the risks inherent in complex insurance products through the development of SRO standards with their subsequent approval. Experts believe that changes in the regulation of investment life insurance can significantly transform this segment and lead to a flow of investment in other investment tools.
By: Nadezhda Pelyevina