Nati ational nal Rein insurer: er: La Launch ch of a Compa - - PowerPoint PPT Presentation

Nati ational nal Rein insurer: er: La Launch ch of a Compa mpany ny in Russ ssia

MOSCOW | SEPTEMBER 20, 2018

1st National Reinsurers Summit

The Law “On organization of insurance business in the RF”

2

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.

• Russian insurance companies have to offer RNRC 10% share in all outward

reinsurance business (treaties or facultative)

• RNRC has the right to abstain from the offered share or sign a share less than

10%

• There are no restrictions on RNRC’s participation with higher lines than 10% or

to sign business outside of Russia

Background of National Reinsurer

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RNRC was launche nched by the end of 2016 6 to to support rt domesti stic c market et and clients ts suffered from m interna rnation

• nal

al sancti tions

• ns

RNRC was found nded afte ter r 25 years s of the e fall of the USSR and commercial cial insur uranc ance e market et appearenc ence Market et regula lation

• n – ove
• veral

all l liberali raliza zati tion

• n

includ uding ing privat atiza izati tion

• n of 2 n

nat ational ional insur urers s (Rosg sgos

• sstr

trakh akh and Ingosstr trak akh) In the absence ce of market t infras astr truct uctur ure, , profess ssional ional inte terme rmediar iarie ies s and lack of domestic stic capacit ity y there were more reason

• ns for setting

ng national ational reins nsur urer r in 90’s

Why national reinsure wasn’t launched with the market liberalization?

• Low insurance penetration
• Low Nat Cat exposure
• The Government aimed total liberalization of the insurance

market

• The attempts of local Insurers to launch PPP reinsurance

company failed due to contradictions of interests and ambitions

• High supply of capacity provided by international markets

2013 2014 2015 2016 2017 HY 2018 premiums ceded to Russian reinsurers premiums ceded abroad

120 157 138 447 120 632 132 132 116 116 10 109 601 601

Russian reinsurance market 2013 - 2017

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Outward reinsurance premium distribution: domestic & international markets

69% 69% 73% 73% 81% 81% 85% 85% 79% 79% 76% 69 269

Niches for development of RNRC

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Serve e clients ents under r sanction ctions s and 10% manda dator

• ry

y cession ssion

• important role on the limited

insurance market Local al market et:

• growth above mandatory cession
• market development through new products

and reinsurance solutions Inte tern rnational tional market et:

• growth and diversification

RNRC Business Model

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7 703 12 491 16 063 19 931 24 755

2017 2018 2019 2020 2021

2017 2018 2019 2020 2021

Premium ium income me forecas ast 2017 2017 – 2021 (mln Rub*)

18% 33% 8% 6% 5% 4% 3%

cons constr truct uction ion property liability financial lines cargo aviation personal accident

• ther

Target t portfolio

• lio st

struct ctur ure

* $ 1 = 68 Rub

6% 20% % - inte terna rnatio ional l busin iness ess

Target t indica cator

• rs:

: CR 70%, ROE E 20%

International business strategy

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500 1 250 2 500 5 000

2018 2019 2020 2021

Inte terna rnati tional

• nal busine

ness ss. . Forecas ast.

• t. GPW 2017 – 2021

1 (mln Rub*)

EEU/CIS, India, China, Eastern Europe, MENA, Sub Saharan Africa, Latin America, Emerging markets in Asia and Africa

Geography aphy of

• f expansi

nsion

• n

* $ 1 = 68 Rub

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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

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• Lack of underwriting information
• Long chains of intermediaries

producing no added value

• Local markets financial instabilities,

political risks, sanctions

• The sovereign rating of the country
• The existence relations with the

markets

• No or limited direct B2B connections
• Lack of market data

The bounds and limits of international expansion

There are some bounds for geographical expansion

altern rnativ tive e is n s needed ed Are there e any altern rnative? e?

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