Warehouse insurance has become more expensive

Insuring warehouses has become more difficult and expensive. Core companies have increased both the requirements for premises and service rates, Vedomosti writes. This is due to a series of large fires, when several storage facilities and the goods inside were almost completely burned out. Experts recall two cases: a fire at the Ozon and OBI warehouses in 2022 and the Wildberries warehouse that burned down in January near St. Petersburg, which, as it turned out, was not insured at all.

Now, when concluding a new contract or extending an existing one, insurers add additional clauses to the policies, confirmed Elena Orlova, head of the sector for working with corporate clients of the insurance broker Nobilis: “If earlier we simply worked with warehouse categories A, B, C, now we are Category A warehouses have increased requirements for assessing their security risk.

There are certain standards that any premises must meet. And now special attention is paid not just to the presence of fire warning and fire extinguishing systems, but to their performance. Because cases were identified when the system was installed, but something was turned off, was inoperable, and this then led to negative consequences that resulted in insurance cases.”

From January to September 2023, insurers made payments to 24 clients for the fire risk. The total volume of such compensation is close to 170 million rubles, as follows from the Central Bank data. Insurers say warehouses are the highest-risk segment. In such rooms it is almost impossible to localize the flame, so the fire inevitably destroys all the contents in a matter of hours. Typically, class A storage facilities contain goods worth 10-15 billion rubles at a time.

High-profile incidents of fires also frightened the tenants themselves. They also require security guarantees from premises owners, says Artem Khomyshin, head of regional business development at FM Logistic in Russia: “Control over compliance with the law has become more stringent. Indeed, many depositors and owners of goods want to be sure that their goods are stored in a safe warehouse where all the requirements of the Ministry of Emergency Situations are met. Often additional requirements are imposed, for example, compliance with international standards, which also have requirements for infrastructure facilities.

We have heard from a number of insurance companies about their desire to increase tariffs for market players. Some increase prices by multiples, others do not change their conditions, but on average in the market the increase was approximately 20-30%.”

At the same time, a facility that is poorly equipped in terms of fire safety cannot be insured at all; no player on the market will take on such risks, Kommersant FM’s interlocutors told. But it’s not just about tightening requirements for warehouses. The procedure has become stricter, including due to the lack of competition in the reinsurance segment, explained Pavel Lipatov, director of the corporate business insurance department at Absolut Insurance:

“The only reinsurer that remains and supports insurance companies in the market is the Russian National Reinsurance Company. She, for her part, introduced certain requirements for insurers when analyzing warehouse risks. This has led to the fact that the approaches of insurers involved in insuring warehouses have approximately leveled off. That is, if previously a warehouse that one insurer did not like could be offered to be insured by another, now there is no such possibility.

This has led to increased costs for insurers for maintaining and administering warehouse risks, since any warehouse requires an inspection. Insurers either open engineering centers that carry out these pre-insurance inspections within their company or engage independent organizations. Accordingly, costs in this case increase.”

In total, according to data for last year, about 16 thousand insurance contracts for goods in warehouses were registered in the country. Collections exceeded 1.5 billion rubles. The total insured amount amounted to 10 trillion rubles, Vedomosti writes.

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Svetlana Belova