Dmitry GARMASH, Head of Moscow Representative Office, BARENTS Re (Panama)
XPRIMM: How would you describe the growth of the Russian insurance market by 2% in the first half of 2015?
Dmitry GARMASH: This figure is a dramatic drop down from growth rates the market experienced during 2010-2014. Unfortunately, it represents the overall Russian economy recession and comprises the more negative inner sectoral insurance dynamics. E.g. the number of policies issued across various lines of business decreased from 7% to 30% in the average; volume of corporate property dropped by around 11%; construction insurance is forecasted to sag by 30% by the end of the year. The macroeconomic environment grounding all these negative changes involves a severe devaluation of Ruble, 8-10% inflation and other threats. Insurance is a kind of “downstream”, derivative segment to the material sectors of economy – trade, construction, metallurgy, oil & gas, etc – so all negative trends there do finally affect insurance, and consequently reinsurance.
XPRIMM: Due to decision of the Central Bank of Russia, more than 40 insurance companies have left the market recently. How would you comment on that?
Dmitry GARMASH: The new, rather strict policy of CB, introduced two years ago, is directed to a completely right way to target market sanitation. The tough control over financial strength, quality of assets and correct market behavior should clean the insurance market from weak, non-professional, very small or empty and idle insurance companies to further concentrate services with the large, reliable players.