Yet another illustration to the current state of the Russian motor segment... On Monday, Ingosstrakh, one of the country’s key insurers, published its H1 auto subrogation data. “On the whole, the situation with subrogation payments remains unsatisfactory. Although a number of companies have started to partly cover their subrogation debts on a voluntary baisis, the overall amount of due payments <to Ingosstrakh – The Insurer> continues to grow, which indicates that the companies either have financial difficulties, or have adopted a strategy of minimizing their voluntary payments” (here is the Russian original).
The non-payers continue to break payment deadlines, cover subrogation claims selectively, and demand extra documents not specified by the Russian law on compulsory MTPL and the Code of Professional Conduct adopted by the Russian Association of Motor Insurers (RAMI), Ingosstrakh laments.
Before you take a closer look to the table, here are a few things worth noting: in H1, subrogation payments due to Ingosstrakh have grown 24% compared to year-end 2009. Debts of only six out of Ingosstrakh’s 23 subrogation partners reduced over the half-year – this is a disastrous dynamics. And it’s highly unlikely that Ingosstrakh is just being unlucky. The same situation must be typical for all other Russian motor insurance players, big and small (small obviously have it worse as their financial pillow is much thinner). And finally – almost all of the insurers featured in the table are either up for sale, or wouldn’t mind attracting foreing investment. Investors, beware, step away from the glass.
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