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Creditor Insurance in Russia

  • April 2014
  • -
  • Finaccord
  • -
  • 29 pages

Finaccord’s report titled Creditor Insurance in Russia offers uniquely detailed insights into the market for creditor insurance, sometimes also referred to as payment protection insurance or loan-related insurance, as acquired by individual borrowers in Russia. Drawing on the results of a survey of 78 lending institutions, the study analyses the distribution of creditor insurance by banks and other lending institutions, how provision rates vary for different lending products, operating models used for arranging creditor insurance, and distribution partnerships weighted by the size of distributors. The PartnerBASE™ dataset that accompanies the report details each of over 130 creditor insurance distribution deals traced by Finaccord. In short, this study will provide you with the definitive guide to current and future opportunities in creditor insurance in Russia.

Key features of this study and the PartnerBASE™ dataset and market data annexe that accompany it include:

- quantification of creditor insurance market size and growth with a timeline from 2009 to 2013 and onwards to 2017: how much is this market really worth in Russia and what is its future development potential

- segmentation of this market both by underlying loan type (differentiating between mortgages, point-of-sale automotive finance, other consumer finance and credit card loans) and by type of cover (differentiating between cover for death / permanent disability and temporary incapacity / unemployment);

- consideration of operating models used for creditor insurance: how advanced is the use of captive and joint venture underwriters by lending institutions in Russia?

- calculation of weighted provider share of partnerships: Finaccord’s unique quantitative analysis helps to identify which underwriters of creditor insurance hold the relationships that offer the most potential;

- investigation into alternative distribution channels for selling creditor insurance: a number of factors could increase the potential for entities other than the lending institutions themselves to sell creditor insurance in Russia.

Table Of Contents

Creditor Insurance in Russia
Table of Contents

Executive Summary

Introduction

Market Analysis

List of Graphics / Tables





0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about?

This report provides a comprehensive analysis of loan-related insurance policies in Russia

Rationale

The report tracks 131 separate initiatives for marketing creditor insurance through lending institutions

Methodology

Survey of banks and other lending institutions

Market data

Definitions

Creditor insurance

Mortgages, consumer finance and credit cards

Weighted provider share of partnerships

Operating models

Abbreviations and exchange rates

PartnerBASEâ„¢ and market data annexe

Finaccord



2.0 MARKET ANALYSIS

Banks and other lending institutions covered

Introduction to the banking sector

Banks owned ultimately by the state continue to exert a strong influence on Russia's banking sector...

... with several foreign banks having decided to exit the market

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

... with a new wave of merger and acquisition activity in evidence since 2008...

... and with further changes in the market structure likely to occur

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

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 expended rapidly in recent years

Credit and other pay later cards

The number of credit cards in circulation has grown rapidly in recent years

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

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

...with VTB Insurance and AlfaStrakhovanie featuring as prominent captive underwriter

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

... with a larger number opting for a hybrid operating model including both captive and non-captive insurers

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

Around three quarters of loan lending organisations offer related creditor insurance

Allianz has established a number of valuable ties in this field

…and Russian Standard Insurance benefits mainly from its captive tie

This market features a relatively high number of captive providers

CiV Life and ERGO Life benefit from strategic partnerships

One quarter of entities offering consumer finance have no program for related creditor insurance

Creditor insurance linked to credit cards

Around one half of 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

Alternative distribution channels

All larger insurance companies promote forms of creditor insurance directly to their customers

Creditor insurance market size, growth and forecast

The market is going to grow at a rapid between 2013 and 2017

... although due the macro-economic environment less rapidly than in recent years

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




LIST OF GRAPHICS / TABLES


TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY

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

1.0 INTRODUCTION

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

2.0 MARKET ANALYSIS

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

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