The number of electronic MTPL policies sold at the end of 2023 amounted to 25.5 million

The number of electronic MTPL policies sold at the end of 2023 amounted to 25.5 million, providing more than 60% of the market as a whole. Recently, there has been a slowdown in growth due to market saturation and the formation of a high base. However, experts and insurers believe that the potential for increasing the number of clients purchasing MTPL policies remotely remains high. They cite the agent sales channel, through which clients receive other services, as well as the fears of the insurers themselves as the main limiting factors.

At the end of 2023, the number of electronic MTPL policies sold exceeded 25.5 million, which is 2 million more than in 2022, said Evgeny Ufimtsev, president of the Russian Union of Auto Insurers (RUA).

This is a record result for the entire period of issuing such policies. However, the growth rate was significantly lower than two years ago. Thus, based on RSA data, in 2021 the number of policies sold increased by approximately 20% (and reached 21.4 million). In 2022, the growth was 8.4%, to 23.2 million. In 2023, the growth was less than 10%.

The share of e-policies in the total number of issued MTPL policies is also growing. According to RSA, if at the end of 2020 and 2021 it was about half, then at the end of 2022 it reached 57%, and in 2023 – already about 62%.

“In 2021, due to the pandemic, many began to make purchases online more often, in particular, to buy e-policies for compulsory motor liability insurance. These clients, having experienced all the advantages of online insurance, continue to use electronic policies,” says Roman Lobodin, director of the compulsory types of insurance department at AlfaStrakhovanie.

According to independent expert Kirill Bobylkov, an electronic policy is convenient for both citizens and insurance companies, since the client can complete all purchase operations without leaving home, and even in places where a classic paper policy was previously issued, insurers offer to issue electronic variant.

The expert also considers the activity of aggregators, which offer their services for selecting policies on favorable terms, and the position of large banks, which are developing sales of compulsory motor insurance in electronic format, to be significant growth factors.

The increase in the popularity of electronic policies may also be associated with a general increase in sales of new vehicles, says Nikolai Galushin, CEO of NISIS. According to the Ministry of Industry and Trade, in 2023, sales of new passenger cars increased by 62%, to 1.06 million units. The secondary market is even larger and continues to actively grow: according to Avtostat-Info, in January-September last year alone, more than 5 million used passenger cars changed their owners (an increase of 27%).

Experts believe that the demand for electronic policies will remain high. According to Mr. Bobylkov’s estimates, in the coming years it is quite possible to expect an increase in the share of such products in total sales to 75–80%. Mr. Galushin believes that ultimately electronic policies will account for 95% of all MTPL contracts.

However, there are also limiting factors in the development of the segment. In OSAGO, the agency channel has historically been strong, and some clients prefer it, since they insure both their car and their apartment through one intermediary, notes Vladimir Shur, director of Kept’s practice for working with financial sector companies.

According to Banki.ru analyst Alexander Makarov, the development of electronic policies is held back by the fears of the insurers themselves, in particular, their “risk appetite.” Everyone who wanted to buy OSAGO online has already done so, in principle, that is, an attractive segment of high-quality clients is already covered by policies, the expert explains. As a result, not very profitable segments remained – in particular, taxi drivers (see “Kommersant” dated December 6, 2023), notes Mr. Makarov, therefore “now insurance companies will not attract customers online as actively as before.”

Yulia Poslavskaya