MFO has thrown a bridge to insurance

The Finbridge group of microfinance organizations acquired the twenty-first century insurance company, which specializes in OSAGO. The group believes that they will be able to compete in the market through high technology. However, experts warn that a high level of digitalization does not guarantee success.

For the first time, a financial group specializing in microfinance entered the insurance market. The Finbridge Group has acquired the twenty-first century insurance company, the group said. The appearance of an insurance asset in the portfolio will allow developing the fintech direction in it and expanding the range of products for corporate and retail clients, they explain there. In “Finbridge” they note that they see a prospect in the development of OSAGO, hull insurance, mortgage property insurance and other types of insurance.

At the same time, experts note that it is quite difficult to increase the performance in the highly competitive OSAGO segment. Pavel Nefedov, director of the underwriting and product management department at IC Soglasie, explains that all companies primarily seek to attract and retain experienced and low-accident clients in their portfolio. And large insurers increased the collection of premiums this year (with the exception of Rosgosstrakh, see Kommersant of July 28). In particular, according to the results of ten months of 2022, Ingosstrakh, VSK, Renaissance Insurance, Yugoria increased premium collection by 1.4–1.5 times, and Tinkoff Insurance more than doubled compared to with last year.

At the same time, the segment is highly unprofitable (according to the statistics of the Central Bank, the level of payments is 70–80% of fees), but it is interesting for insurers by the possibility of cross-selling other products. The head of the project office of the insurance vertical of the Banki.ru marketplace, Alexander Makarov, points out that “OSAGO is a mandatory type of insurance, due to which it is much easier to attract customers than voluntary types.” But when the client has already become acquainted with the company and its service, it becomes a little easier to sell him a voluntary type of insurance than if it were done by an insurance company unknown to the client. However, according to Mr. Makarov, this requires significant financial resources to cover marketing expenses and losses arising at the first stage, when the company’s portfolio includes only OSAGO.

At the same time, Finbridge sees the main competitive advantage in digitalization. The group estimates that the customer journey of the top 10 insurance companies is approximately 30-40% digitized. And they plan to invest 800-900 million rubles in the transformation of the acquired company. The changes will affect, in particular, the digitalization of business processes, the development and expansion of digital sales channels, as well as infrastructure, which will make the process of buying a policy faster and, in general, will save on transaction costs.

Such investments may not give a quick result, market participants note. According to Andrey Suchkov, the head of the department for work with car manufacturers of the AST insurance broker, the situation with spare parts is difficult on the market, so we can talk about high technology, but if the company does not physically have spare parts, this is relegated to the fifth plan.

Julia Poslavskaya, Polina Trifonova