Sovcombank Insurance was the first to decide to abandon intermediaries in the sale of compulsory motor liability insurance

Sovcombank Insurance was the first of the large insurance companies to decide to abandon the agent and brokerage sales channel in MTPL. The company considers high intermediary commissions unjustified. But in the first half of the year this led to a significant decrease in premium collections. Experts admit that the abandonment of the main sales channels indicates that the company is preparing to leave this market segment. However, the company itself denies such intentions.

The collection of premiums for compulsory motor liability insurance from Sovcombank Insurance (one of the twenty largest in the segment) fell by 28% in the first half of the year, according to Central Bank data. At the same time, even larger insurers showed an increase in fees by 20–50%. The company explained the negative dynamics by refusing to sell MTPL policies in the agent and brokerage channels with high commissions in favor of company-managed channels with low commissions.

According to statistics, the main share of MTPL sales falls on agent and brokerage channels, as well as sales through organizations engaged in vehicle trading, notes Ekaterina Serova, director for ratings of insurance and investment companies at Expert RA.

And according to a survey of other insurers, they have no plans to abandon these sales channels.

Increasing opportunities for MTPL sales agents is included in the AlfaStrakhovanie strategy. At RESO-Garantiya, the agency channel remains the main one for promoting insurance services, including the most widespread one – OSAGO. Ingosstrakh, VSK, Rosgosstrakh, Renaissance Insurance, Soglasiya, MAKS, and Zetta Insurance do not plan to abandon the agent sales channel. “Our agent channel is the leader among others in terms of the volume of compulsory motor liability insurance—in eight months, collections through it exceeded 34% of collections across all channels,” noted Yulia Shabanova, head of the agency and office sales unit at Rosgosstrakh.

Agents, like brokers’ employees, sell, in addition to compulsory motor liability insurance, many other insurance products that need to be explained to the client, conveying to him their essence and advantages, notes Pavel Yakovlev, senior product manager for auto insurance of the retail insurance department of RESO-Garantiya. At the same time, Absolut Insurance recognizes that there may be risks in the agent channel, in particular, the provision of incorrect data by the agent to reduce the cost of the policy in order to retain the client.

However, insurers are also developing other channels, in particular online sales. “The agent channel is the business line that can best monetize the MTPL base. Self-purchase channels, primarily the website and marketplaces, are also actively developing, but they are organically separated from agency sales in the market, since their main client audience is different,” explains Maria Filippova, head of agency and brokerage sales channels at AlfaStrakhovanie. She estimates that the flow from agents to direct self-purchase channels is about 3% of the customer base.

According to experts, the company’s refusal to use the agent sales channel may indicate a planned exit from the segment.

“The group obviously does not see any prospects for working with compulsory motor liability insurance, since it is extremely complex and unprofitable. Plus, this is a mandatory type of insurance, and according to the law, the insurance company cannot refuse clients’ requests for insurance,” says Mikhail Kunin, head of the personal insurance department of the insurance broker Nobilis. Therefore, he does not rule out that the continuation of this story could be the “surrender of the license.”

However, Sovcombank Insurance stated that they do not intend to leave the OSAGO market. At the same time, they noted that in motor insurance they are focusing on motor hull insurance. Thus, the growth in premiums in the first half of 2023 was 75% compared to last year, and the volume of premiums collected exceeded RUB 3.3 billion.

Yulia Poslavskaya