How insurers fight banks for mortgages

Mortgage is the only segment of lending in which mandatory insurance has never been eliminated; the collateral (title) is always insured, and in most cases, the life and health of the borrower as well. According to the law, the client can choose his own insurer. However, in practice this is not always the case. Despite the regulator’s sidelong glances and the indignation of citizens and competitors, bankers are finding ways to direct borrowers to the right insurers. For example, this may be a condition for receiving attractive rates.

The reason for this activity is clear: the mortgage insurance segment, where loss rates are low, is more than attractive. And, given the term of the mortgage loan, even a small reduction in the rate can be very, very important for the client. But other market participants are not asleep and are trying to fight such “abuses of power,” especially if we are talking about such a serious player as Sberbank. It was his practice of linking rates with the choice of insurer (see Kommersant on August 7) ​​that became the reason for the active actions of a number of competitors.

Thus, the other day, one of the leading insurers allegedly recommended that agents complain about Sberbank to the Central Bank and the Federal Antimonopoly Service, having sent out the appropriate templates to their partners. To the FAS, the insurer proposes to complain that the conclusion of an agreement between Sberbank, Domklik and Sberbank Life Insurance is a refusal for other market participants to admit the bank’s borrowers to insure the risks. The complaint asks regulators to hold Sberbank administratively liable for violating licensing requirements and including conditions in the contract that “knowingly infringe on consumer rights.” Other insurance companies may also adopt the practice.

But complaints to regulators are usually a very long way to success. Therefore, for example, AlfaStrakhovanie uses a different method. According to specialized Telegram channels, the company has raised the commission for mortgage insurance at Sberbank to 65–70%. Typically, agents’ commission for selling mortgage insurance policies is approximately 45-55%. The point is that Sberbank is reducing the rate when insuring the life of a borrower in its company, AlfaStrakhovanie agents are fighting for the title, that is, collateral insurance.

The weakness of all these strategies is primarily that they lack or are far from obvious any incentives for borrowers. Why should the latter suddenly refuse the attractive conditions of Sberbank? To support the species diversity of insurers for humanistic reasons? Meanwhile, the simplest way to compete is to make an offer to customers better than that of Sber, which none of the major market participants is particularly using yet.