The Central Bank plans to establish a financial risk standard for insurance companies

The Central Bank plans to establish a financial standard for the risks that the insurance company will be obliged to collectively retain on its responsibility, without transfer under a reinsurance agreement. According to a representative of the regulator, insurers currently transfer more than 99% of risks to the state reinsurance company. It is proposed to oblige insurance companies to leave risks of at least 50 million rubles on their balance sheets. Experts point out that the standard, established without reference to the company’s financial performance, could result in a serious increase in the burden on capital for small insurers.

The Bank of Russia plans to establish for insurers the amount of risks left on their own, Ilya Smirnov, head of the regulator’s insurance market department, told reporters on the sidelines of Finopolis. According to him, the situation in which the insurer enters into an agreement with the Russian National Reinsurance Company (RNRP) and “transfers to it for reinsurance 99.9% of the risks” accepted under the direct insurance agreement, “leaving a penny for its own deduction, this is for the market as a whole in the long run the wrong model” (quoted by “Interfax”).

At the same time, the Central Bank is trying to avoid a sharp increase in its own retention threshold. The currently discussed minimum amount of own deduction – 50 million rubles – is feasible for small insurance companies, Mr. Smirnov believes. At the same time, in his opinion, such a threshold will not limit competition in the insurance market.

Insurance companies note that the retention rate depends on both the portfolio and the type of insurance.

“Our own retention relative to the maximum capacity of obligatory reinsurance contracts is 2–10%,” notes Alexey Khutoryansky, director of the underwriting department for corporate types of insurance at Soglasie. At the same time, according to him, “in the largest risks worth tens and hundreds of billions of rubles, the share of even the leaders of the insurance market will be 1–3% or less.” Sovcombank Insurance notes that depending on the portfolio, the volume of risks left on its own retention is different, however, if we count by premium, then under comprehensive insurance more than 99% is transferred to reinsurance.

However, such regulations could result in a serious burden for small insurers, experts say. “If a company retains risks exceeding 10% of its capital, then if these risks materialize, the insurer may face losses,” explains Olga Basova, senior director for ratings of insurance and investment companies at Expert RA. According to Kommersant’s interlocutor in the insurance market, risk retention in the amount of 50 million rubles. for small insurers with a capital of 1–3 billion rubles, this is significant money.

The normalization of any values ​​must be carefully worked out, experts say.

Since the amount of own retention largely depends on the capital of the insurer, the volume of the portfolio, the insured amount for the risk, the likelihood of an insured event, the accumulation of risks in a certain territory, etc., it is logical to determine any standards in relative terms, and not in absolute, according to Sovcombank Insurance.

At the same time, a number of experts believe that such a rule could have a positive impact on the market. The strategy of increasing own retention helps to increase the responsibility of insurers and develop competition within the insurance market, says Sogaz executive director for underwriting Anar Bakhshaliev. As the amount of own deduction increases, the cost of making wrong decisions and, accordingly, the risk of uncompensated losses for the insurer increases, says B1 partner Tatyana Samsonova. Consequently, according to her, the insurer’s motivation to take a more careful approach to risk selection, tariff determination, as well as to the assessment and settlement of losses increases.

The RNPK did not promptly respond to Kommersant’s request.

Yulia Poslavskaya