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Bancassurance in Russia: Life, Non-Life and Creditor Insurance Product Image

Bancassurance in Russia: Life, Non-Life and Creditor Insurance

  • Published: March 2014
  • Region: Russia
  • 69 Pages
  • Finaccord

Bancassurance in Russia: Life, Non-Life and Creditor Insurance is a study and related PartnerBASE™ dataset examining the provision of life, non-life and creditor insurance by banks and other lending institutions in Russia.

Drawing on the results of a survey of 78 banking entities in Russia, the study verifies the percentage of organisations investigated that distribute each of the following 13 types of insurance: accident insurance, creditor insurance related to consumer finance, creditor insurance related to credit cards, creditor insurance related to mortgages, critical illness insurance, health / hospital cash plans, household insurance, income protection insurance, investment-related life insurance, medical expenses insurance, personal motor insurance, retirement savings, and risk life insurance.

For those banking entities that are active in one or more of these fields, the reports ascertain the operating models that they use to source the type of insurance in question (e.g. external, joint venture or captive underwriters) and the identity of the specific providers used. This information is then displayed in terms of the weighted share of partnerships of these READ MORE >

0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about?

Distribution partnerships with banks and other lending institutions constitute the focus of this report

Rationale

Bancassurance has become the most important distribution channel for life insurance in Russia

Methodology

Survey of banks and other lending institutions

Market data

Definitions

Investment-related life insurance

Retirement savings

Risk life insurance

Critical illness insurance

Income protection insurance

Accident insurance

Health / hospital cash plans

Medical expenses insurance

Personal motor insurance

Household insurance

Creditor insurance

Mortgages, consumer finance and credit cards

Weighted provider share of partnerships

Operating models

Abbreviations and exchange rates

PartnerBASE and market data annexe

Finaccord

2.0 MARKET BACKGROUND

Banks and other lending institutions covered

Introduction to the banking sector

Around 900 banking institutions are active in Russia...

... although the top five control over 50% of assets

Penetration of foreign entities in the Russian banking sector is quite limited...

... with several having decided to exit the market

Russia’s banking sector has changed very significantly in recent years...

... with further changes in the market structure likely to occur as a result of several factors

In spite of its problems, there is plenty of scope for the Russian retail banking market to grow

3.0 INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS

Insurance market size and growth

Despite rapid growth, the market for investment-related life insurance remains small

Non-state pension funds (NPFs) account for the majority of retirement savings

Distribution share of banks

The primary bancassurance focus of Russian banks lies on creditor and motor insurance

Bancassurance provision rates, operating models and partnerships

Investment-related life insurance

Investment-related life policies are available from relatively few banks...

... although these include some of the largest competitors...

... including Sberbank, which sources policies from its captive insurance subsidiary

… which has joined several other captive underwriters in the Russian bancassurance arena

A total of five non-captive insurance providers are active in this field

A number of large banks have not yet started to distribute investment-related life insurance

Retirement savings

Close to a half of banking institutions researched promote retirement savings…

... in many cases through their own captive vehicles…

…such as NPF Sberbank, NPF Russian Standard and NPF VTB

NPF Lukoil Garant and NPF Renaissance are the most prominent non-tied providers

Performance of key bancassurance underwriters

Captive underwriters control over 40% of the total life insurance market in Russia...

…and despite its recent market entry Sberbank Insurance accounts already for a 12% market share

4.0 PROTECTION-RELATED LIFE INSURANCE

Insurance market size and growth

Protection-related life insurance increased by 34.8% per annum in real terms between 2009 and 2013

Distribution share of banks

Bancassurance provision rates, operating models and partnerships

Risk life insurance

Stand-alone risk life insurance is rarely marketed by Russian banks…

… with captive underwriters most prominent where available

Critical illness insurance

Stand-alone critical illness policies are also a rarity...

Income protection insurance

... as is income protection insurance

Performance of key bancassurance underwriters

5.0 ACCIDENT AND HEALTH INSURANCE

Insurance market size and growth

Compulsory health insurance for government employees makes up the bulk of the market

Distribution share of banks

Bancassurance provision rates, operating models and partnerships

Accident insurance

Accident insurance is offered by around one quarter of banks investigated in Russia

....with Russian Standard Insurance the leader by weighted share of partnerships

MetLife is likely to be the most prominent underwriter not owned by a banking organisation

Liberty Mutual acquired KIT Finance Insurance in March 2012

25 banking organisations with more than one million retail customers do not offer accident insurance

Medical expenses insurance

As bancassurers, Russian Standard Insurance and VTB Insurance dominate this market

Health / hospital cash plans

Performance of key bancassurance underwriters

Most ‘accident and health insurance’ distributed by banks is actually creditor insurance

6.0 PERSONAL MOTOR AND HOUSEHOLD INSURANCE

Insurance market size and growth

Personal motor insurance gross written premiums declined in real terms between 2009 and 2013

Distribution share of banks

Bancassurance is important as a distribution channel for both personal motor and household insurance

Bancassurance provision rates, operating models and partnerships

Personal motor insurance

Provision rates are fairly high because car finance customers must also take out motor insurance…

… although many banks have not entered into fully-fledged partnerships

AlfaStrakhovanie works not only with Alfa-Bank but also with at least a dozen other banking networks

UralSib Insurance and VTB Insurance also have a strong position in this market due to captive ties

A total of 13 captive underwriters are active in this field

A number of large banks that could sell motor insurance do not yet do so

Household insurance

The provision rate for household insurance is higher than that for personal motor insurance…

…although existing partnerships are often similar to those for motor insurance

Allianz benefits from a large number of distribution agreements in this market...

... as does Zurich

Performance of key bancassurance underwriters

Bank-owned underwriters have gained market share in motor liability insurance...

... and have also performed quite strongly in property insurance

7.0 CREDITOR INSURANCE

Consumer lending market size and growth

Mortgage lending

Russian home loans grew at a nominal compound annual rate of 23.7% between 2009 and 2013

Non-mortgage lending

The value of total non-mortgage consumer lending has expanded rapidly in recent years

Credit and other pay later cards

The number of credit cards in circulation has also advanced very strongly

Creditor insurance provision rates, operating models and partnerships

Creditor insurance linked to mortgages

A wide range of operating models is used to source mortgage-related creditor insurance in Russia...

... although a number of banks still lack a coherent system for offering it...

... with an approach driven by regulatory considerations rather than strategy

Rosgosstrakh, VSK, Allianz, Cardif and Sberbank Insurance are identifiable as market leaders...

...followed by VTB Insurance and AlfaStrakhovanie

A number of banking institutions, including Probisenes Bank, work with a single underwriter...

... although others opt for a hybrid operating model including both captive and non-captive insurers

Nine mortgage lenders have no apparent arrangement for related creditor insurance

Typically, mortgage-related insurance in Russia is configured differently to other European countries...

... with mandatory mortgage insurance complemented increasingly by voluntary creditor insurance

Creditor insurance linked to consumer finance

Most banks that could offer creditor insurance linked to consumer finance have chosen to do so

Allianz has established a number of valuable ties in this field...

... as has Rosgosstrakh including a captive link with Rosgosstrakh Bank

Attracted by its rapid growth rate, this market features a relatively high number of captive providers

Sberbank continues to utilise several external partners in addition to its own captive insurer

CiV Life and ERGO Life both benefit from international strategic partnerships

There remains considerable scope to create new partnerships for this type of insurance

Creditor insurance linked to credit cards

Around one half of major credit card issuers have developed an associated creditor insurance scheme

AlfaStrakhovanie claims the highest weighted share of partnerships in this field...

…and Cardif has distribution ties with two of Russia's major banks

Creditor insurance risk coverage

Cover for temporary incapacity and unemployment is most commonly available to credit card customers

Creditor insurance market size, growth and forecast

The market value soared from 2009 to 2013 and is forecast to continue doing so...

... across all types of consumer lending product

Statistics exist to help quantify the market for creditor insurance in Russia

LIST OF GRAPHICS / TABLES

TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY

Overview of bancassurance provision rates for different types of insurance in Russia, 2014

1.0 INTRODUCTION

Banks and other lending institutions in Russia contacted by Finaccord, segmented by type

2.0 MARKET BACKGROUND

3.0 INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS

Gross written premiums for investment-related life insurance and retirement savings in Russia, 2009 to 2013

Gross written premiums for investment-related life insurance and retirement savings in Russia, 2009 to 2013 (table)

Distribution share of banks in total life insurance in Russia, 2008 to 2012

Bancassurance premiums written in Russia, segmented by insurance line, 2009 to 2012

Bancassurance provision of investment-related life insurance in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of retirement savings in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Market share in total life insurance of key bancassurance underwriters in Russia, 2009 to 2013

4.0 PROTECTION-RELATED LIFE INSURANCE

Gross written premiums for protection-related life insurance in Russia, 2009 to 2013

Gross written premiums for protection-related life insurance in Russia, 2009 to 2013 (table)

Bancassurance provision of risk life insurance in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of critical illness insurance in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of income protection insurance in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

5.0 ACCIDENT AND HEALTH INSURANCE

Gross written premiums for accident and health insurance in Russia, 2009 to 2013

Gross written premiums for accident and health insurance in Russia, 2009 to 2013 (table)

Bancassurance provision of accident insurance in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of medical expenses insurance in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Market share in total accident and health insurance of key bancassurance underwriters in Russia, 2009 to 2013

6.0 PERSONAL MOTOR AND HOUSEHOLD INSURANCE

Gross written premiums for personal motor and household insurance in Russia, 2009 to 2013

Gross written premiums for personal motor and household insurance in Russia, 2009 to 2013 (table)

Bancassurance provision of personal motor insurance in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Bancassurance provision of household insurance in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Market share in total motor liability insurance of key bancassurance underwriters in Russia, 2009 to 2013

Market share in total property insurance of key bancassurance underwriters in Russia, 2009 to 2013

7.0 CREDITOR INSURANCE

Residential mortgage lending balances outstanding in Russia (absolute and per capita), 2009 to 2013

Consumer non-mortgage lending balances outstanding in Russia (absolute and per capita), 2009 to 2013

Credit and other pay later cards issued and per capita in Russia, 2009 to 2013

Key data points for the consumer lending market in Russia, 2009 to 2013

Provision of creditor insurance linked to mortgages in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Provision of creditor insurance linked to consumer finance in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Provision of creditor insurance linked to credit cards in Russia, 2014: provision rate, operating models and weighted provider share of partnerships

Risk coverage of creditor insurance policies in Russia, segmented by type of underlying product, 2014

Creditor insurance gross written premiums in Russia, segmented by policy type, 2009, 2013 and 2017

Creditor insurance gross written premiums in Russia, segmented by cover type, 2009, 2013 and 2017

Creditor insurance gross written premiums in Russia, segmented by policy and cover type, 2009, 2013 and 2017

Note: Product cover images may vary from those shown

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