Insurers are recording a significant reduction in legal payments under compulsory motor liability insurance to 30–50% of the amount of damage

Insurance market participants note a significant reduction in court payments under compulsory motor liability insurance. Experts attribute the trend to the effective fight against fraud and active pre-trial settlement, including at the basic stage of interaction between the insurer and the client. For companies, this option is almost always cheaper, since the courts often side with citizens. It saves clients significant time and effort, but as a result, payments can be only 30–50% of the amount of damage, experts say.

Legal payments from insurers in the MTPL segment have decreased fourfold over six years, said Evgeny Ufimtsev, president of the All-Russian Union of Insurers (VSU). In 2017, court payments accounted for about 20% (37.4 billion rubles) of the total volume of payments, while according to the results of January-September 2023 – only 5% (6.3 billion rubles). The share of legal costs, fines, penalties and penalties in such payments remained at approximately the same level – about half.

According to independent expert Andrei Barkhota, the judicial practice of recent years in civil disputes between insurers and policyholders “turned out to be not the most optimistic for companies.” In most cases, the courts side with citizens, since in order to make a positive decision in favor of the insured persons, the courts only need to consider the insurance rules and the circumstances in which the damage occurred, the expert explains.

The Russian Union of Auto Insurers (RUA) believes that the main reason for the sharp decline in the share of legal payments was the emergence of a financial ombudsman in 2020. It is imperative to contact his service before filing a claim in court, and in most cases, the dispute between the policyholder and the insurer is resolved at the stage of consideration by the financial ombudsman, explains Alexey Yanin, managing director for ratings of insurance and investment companies at Expert RA.

However, market participants emphasize that insurers themselves are trying to avoid taking the dispute to court.

According to one of Kommersant’s sources, insurance companies have become “more strict and active in inviting the client at the settlement stage to sign an agreement under which he waives further potential claims upon receipt of payment.”

The option of reaching a pre-trial agreement is often more beneficial for both parties: insurers reduce costs and do not worsen their reputation, while clients reduce the time to receive payment, Mr. Barhota believes.

A decrease in the number of court cases makes it possible to reduce the number of lawyers participating in the processes, but increases the requirements for employees of loss settlement services, clarifies Alexander Tsyganov, a professor at the Financial University under the Government of the Russian Federation.

“The client of the insurance organization either resolves the issue through the financial ombudsman, or the company itself does not bring the matter to the point of contacting the service at the claim stage and resolves disagreements. Accordingly, there are fewer legal costs,” confirms Financial Commissioner Svetlana Maksimova.

At the same time, human rights activists believe that the current situation is unprofitable for clients.

“Free services of a financial ombudsman were imposed on consumers, depriving people of the opportunity to immediately go to court, thus there is a serious time gap between an accident and the possibility of judicial protection with subsequent receipt of the required payments,” says Dmitry Yanin, chairman of the board of the International Confederation of Consumer Societies (ConfOP).

According to Mr. Yanin, people agree to compensation in the amount of 30–50% of the amount of damage caused, “just to avoid dealing with the bureaucracy.”

Yulia Poslavskaya