An alternative to derivatives
Aleksey Yurievich Laikov,
Director General of Insurance Broker RIFAMS Ltd.
When it comes to the state and prospects for the development of domestic reinsurance business, its continuing direct dependence on the state of domestic primary insurance must be emphasized.
In fact, Russian reinsurance has still not become a separate “type” of insurance activity, as some may superficially think for some reason, but only a derivative of direct insurance, with the same characteristics and features.
Today's mythical “sustainable insurance growth” is basically “ensured” by inflation, but in truth, the market has been steadily developing a decline in the quality and solvency of the customer base, accompanied by the growth of opportunism and mutual distrust between the participants in insurance relations.
All this is expressed in reinsurance, in an even more concentrated form: the reduction and continuing redistribution of the shrinking customer base results in a decrease in the volume of reinsurance transactions, instability and reduced solvency of insureds - in the pricing policies taken by insurers and reinsurers, distrust towards domestic suppliers of insurance and reinsurance services, Russian banks and the economy as a whole - in the increasing demands from insureds for placing reinsurance coverage abroad, etc.
In the longer term, if the foundations of modern social and economic policy remain unchanged, and despite the introduction of new compulsory types of insurance, these trends in domestic insurance and reinsurance, respectively, are not going to simply persist, but also intensify, since increasingly “forced” voluntary insurance requiring reinsurance will “narrow” even more.
Development of Russian reinsurance on an independent basis is a positive alternative. Export of reinsurance services can serve a real driving force for such development. However, systemic support from the state is required, in particular, the abolition of the odious tax levied on compensatory payments to non-residents and implementation of a number of incentive measures. Relevant proposals have been developed by the reinsurance community, yet their implementation is a matter of an interested and competent state policy.
REMARK journal. 2011. No. 3(19). P. 25.