PSB Group is ready to insure the property of enterprises in new territories of the Russian Federation against war risks

PSB Group is ready to insure the property of enterprises in new territories against war risks. However, experts point out that the amount of risk accepted is limited, and for clients the service will cost many times more than in standard tariffs. In addition, according to market participants, the group will have difficulties with reinsurance, including through the state-owned RNPK.

Deputy Chairman of the Government of the Zaporozhye Region for Economics Andrey Kozenko told TASS that the PSB group is ready to insure enterprises in the region against war risks as part of property insurance. According to the official, applications will primarily come from “socially important businesses,” in particular, bakeries and dairies. PSB confirmed to Kommersant that the group is ready to consider insurance applications in new regions and formulate on their basis “individual proposals, including with the involvement of market players, taking into account a comprehensive risk assessment.”

According to experts, insurance conditions are the first to raise questions. “Military actions are not insured at all, and therefore it is essentially impossible to assess the risks. Either the insurer will offer some small limits, which will not be interesting, or very high tariffs, which will also be uninteresting,” says Kommersant’s interlocutor from among the insurers.

Tariffs depend on the policy of the insurer, but they will be significantly higher than usual, another Kommersant interlocutor is sure. According to him, under normal conditions, rates for property insurance of enterprises are 0.1–0.9% of the insured amount. Alexander Tsyganov, a professor at the Financial University under the Government of the Russian Federation, believes that tariffs can exceed the market average by two or more times. And not only because of the greater risk, but also because of the increased costs of doing business – it is necessary to assess the risk, research the insurance object, create selling units and settle losses, he notes.

However, the amount of risk that a company can take on is small. According to Kommersant’s interlocutor in the financial market, it will amount to approximately 5 billion rubles, which is enough for 10–50 objects. Insurance priority will apparently be given to new buildings, the destruction of old ones will be considered as the first stage of renovation, and the damage will be covered by direct transfers from the budget, notes Anna Avakimyan, chief analyst at Regblok. Another Kommersant interlocutor names “damage as a result of military operations, including UAV attacks,” among the possible risks.

The insurer may have difficulties with reinsurance of accepted risks, market participants believe. According to a Kommersant source at one of the major insurers, Russian reinsurance companies do not currently take on military risks. In general, it is impossible to insure military risks through the mechanism of commercial insurance, emphasizes Kommersant’s interlocutor from another insurance company. RNPK (owned by the Bank of Russia) could cover risks outside the scope of insurance rules, but only on government directives, another Kommersant interlocutor believes. The RNPK declined to comment. The Central Bank did not respond to Kommersant’s request.

This summer, the government was working on a draft resolution on property insurance of cargo in new territories for military risks – terrorist attacks and sabotage (Kommersant got acquainted with it). According to the document, RNPK will receive subsidies (1 billion rubles) from the state to reimburse insurers for their expenses on paying the insured amount. However, the company itself is in no hurry to take on such risks. In particular, according to the Insurance News Agency (ASN), RNPK wants to refuse to reinsure objects in Moscow City against terrorist attacks “due to the inability to control the accumulation of risks.”

Yulia Poslavskaya