Nati ational nal Rein insurer: er: La Launch ch of a Compa mpany ny in Russ ssia 1 st National Reinsurers Summit MOSCOW | SEPTEMBER 20, 2018
The Law “On organization of insurance business in the RF” Russia ian Natio tional Reinsurance ce Company y was established in October tober 2016 16 by the Central Bank of the Russian Federation in accordance with the Federal Law № 363 of July 3, 2016 "On amendments to the Federal Law "On organization of insurance business in the Russian Federation“. The m main in target et is to to support rt the busin iness ess under r sancti ctions and to e enlarge e domes estic c reinsurance e capaci city ty. o Russian insurance companies have to offer RNRC 10% share in all outward reinsurance business (treaties or facultative) o RNRC has the right to abstain from the offered share or sign a share less than 10% o There are no restrictions on RNRC’s participation with higher lines than 10% or to sign business outside of Russia 2
Background of National Reinsurer In the absence ce of market t infras astr truct uctur ure, , RNRC was found nded afte ter r 25 years s of the e profess ssional ional inte terme rmediar iarie ies s and lack of fall of the USSR and commercial cial insur uranc ance e domestic stic capacit ity y there were more market et appearenc ence reason ons for setting ng national ational reins nsur urer r in 90’s Market et regula lation on – ove overal all l liberali raliza zati tion on RNRC was launche nched by the end of 2016 6 to to includ uding ing privat atiza izati tion on of 2 n nat ational ional support rt domesti stic c market et and clients ts insur urers s (Rosg sgos osstr trakh akh and Ingosstr trak akh) suffered from m interna rnation onal al sancti tions ons Why national reinsure wasn’t launched with the market liberalization? Low insurance penetration o Low Nat Cat exposure o The Government aimed total liberalization of the insurance o market The attempts of local Insurers to launch PPP reinsurance o company failed due to contradictions of interests and ambitions High supply of capacity provided by international markets o 3
Russian reinsurance market 2013 - 2017 Outward reinsurance premium distribution: domestic & international markets 138 447 132 116 132 116 120 157 120 632 73% 73% 109 601 10 601 85% 85% 81% 81% 69% 69% 79% 79% 69 269 76% 2013 2014 2015 2016 2017 HY 2018 premiums ceded to Russian reinsurers premiums ceded abroad 4
Niches for development of RNRC Serve e clients ents under r sanction ctions s and 10% manda dator ory y cession ssion important role on the limited o insurance market Local al market et: growth above mandatory cession o market development through new products o and reinsurance solutions Inte tern rnational tional market et: growth and diversification o 5
RNRC Business Model Premium ium income me forecas ast Target t portfolio olio st struct ctur ure 2017 – 2021 (mln Rub*) 2017 * $ 1 = 68 Rub 6% constr cons truct uction ion 24 755 3% 18% 4% property 19 931 5% 16 063 liability 12 491 6% financial lines 7 703 cargo 8% 33% aviation 2017 2018 2019 2020 2021 personal 2017 2018 2019 2020 2021 20% % - inte terna rnatio ional l busin iness ess accident other Target t indica cator ors: : CR 70%, ROE E 20% 6
International business strategy Inte terna rnati tional onal busine ness ss. . Forecas ast. t. GPW 2017 – 2021 1 (mln Rub*) 5 000 Geography aphy of of expansi nsion on EEU/CIS, India, China, Eastern Europe, MENA, Sub Saharan Africa, Latin America, Emerging markets in Asia and Africa 2 500 1 250 500 2018 2019 2020 2021 * $ 1 = 68 Rub 7
Threats and challenges Exten ensio sion n of sanctio ctions Under er the condi ditio ions ns of WTO: : Russi ssians ans insu surance ance mark rket et will ll be opened ed to branches ches of intern ernation tional al insu surer ers s in 2021 New w law on househ sehold ld insu surance ance against t natural al haza zards: ds: risk sk accumu mula latio ion n and d poten ential tial antiselectio tiselection 8
The bounds and limits of international expansion There are some bounds for geographical expansion o The sovereign rating of the country o Lack of underwriting information o The existence relations with the o Long chains of intermediaries markets producing no added value o No or limited direct B2B connections o Local markets financial instabilities, o Lack of market data political risks, sanctions Are there e any altern rnative? e? altern rnativ tive e is n s needed ed 9
THANK YOU FOR YOUR ATTENTION! Dukat Place III, 6, Gasheka street, Moscow, Russia, 125047 tel +7 (495) 730 44 80 | fax +7 (495) 730 44 79 | rnrc@rnrc.ru www.r .rnr nrc. c.ru
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