The insurance market is expected to slow down in growth rates in 2024 amid a strict monetary policy

According to analysts, the insurance market will show a serious slowdown in growth rates in 2024. Its key segments, life and auto insurance, will grow faster than the overall market, but accident and health insurance could see a significant decline in premiums. The main reason for the slowdown in growth will be the high key rate and the tight monetary policy of the Central Bank. At the same time, the previously introduced relaxations may increase the attractiveness of savings insurance products.

By the end of 2024, the volume of the insurance market will grow by only 2–5%, to 2.2 trillion rubles, according to Expert RA analysts. This result will be significantly lower than in 2023: an increase of 15–16%, to approximately 2 trillion rubles. Most segments will also show a slowdown in dynamics.

In particular, the life insurance segment will grow by 5–7% (to RUB 714 billion) versus 30–35% a year earlier. MTPL collections will also show an increase of 5–7%, to RUB 330 billion. (a year earlier – 12–15%). In the comprehensive insurance segment, the growth in premium collection will increase by 3–5%, to RUB 250 billion. (in 2022 – 6–8%). The only segment that may show a decline, and a significant one, analysts believe is accident and illness insurance, where premiums in 2024 could be reduced by 10–15%. (in 2023 – growth to 5%).

The main reason for the slowdown will be the high key rate and the tight monetary policy of the Central Bank. Due to the rise in the cost of mortgage lending, as well as the winding down of preferential programs and changes in their conditions, there will be a reduction in credit life insurance, according to the Expert RA review. Experts expect mortgage portfolio growth rates of 10–15% in 2024, which is half the level of 2023 (see “Kommersant” dated December 25, 2023). Accident and illness insurance is mainly associated with consumer lending and is highly dependent on its dynamics, notes Olga Basova, senior director for ratings of insurance and investment companies at Expert RA.

Insurance companies are also talking about slowing growth. The forecast of 3–7% “looks realistic,” according to RESO-Garantiya and Absolut Insurance.

At the same time, the companies believe that the motor insurance segment can show growth by 4–6%, and MTPL by 3–4%.

Ingosstrakh expects “less pronounced dynamics” in MTPL insurance in the absence of expansion of the boundaries of the tariff corridor. The last time the Central Bank expanded the tariff corridor in September 2022 by 26% in both directions. The effect of increasing tariffs on compulsory motor liability insurance “has already exhausted itself,” Ms. Basova notes, so the growth rate this year will already be lower than last year.

At the same time, according to experts, there is still “considerable unrealized potential” in compulsory motor liability insurance. “We see a significant difference between the number of MTPL policies and the size of the vehicle fleet, amounting to millions of cars,” explains independent expert Kirill Bobylkov. The pace of policy sales has always lagged behind the volume of cars sold. At the end of last year, according to the Ministry of Industry and Trade, sales of new passenger cars increased by 62%. According to the basic forecast of Autostat, sales of new passenger cars in 2024 will increase by 18%, to 1.25 million units.

An increase in deposit rates will make investment products of insurance companies less attractive.

In December 2023, the influx of citizens’ funds into banks was a record high and exceeded the expectations of market participants (see “Kommersant” dated January 11). However, according to B1 partner Tatyana Samsonova, the trend can be compensated by the growth in sales of other products, in particular those operating on the principle of equity and endowment life insurance (DSZH and NSZH), which can offer interesting returns in conditions of high market rates and tax benefits.

According to the general director of RSHB Life Insurance, Andrei Chuiko, from 2024 Russians will have the opportunity to receive an increased tax benefit of up to 19.5 thousand rubles. per year for contributions to insurance programs for a period of five years. This could further increase the attractiveness of long-term savings products, he believes, which, in turn, will have a positive impact on the total volume of insurance premiums collected.

Yulia Poslavskaya