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development strategy, Gref looks not to compete with traditional banks, but with companies such as Google, Amazon, and Alibaba. Gref’s aspirations can also be considered a state directive: in September, Putin instructed Sberbank to expand its technological experience to new spheres across the country.
To do this, however, Sberbank needs a strategic partner. While Gref initially targeted Yandex, establishing a joint venture that would create the “Russian Amazon” in 2017, the relationship between the companies suffered after Sberbank’s attempts to buy a 30% stake in Yandex were rebuffed. Having hit a dead end, the bank turned to Yandex’s main competitor: Mail.ru.
What are some consequences of this potential deal? As The Bell writes, it will solidify an alliance between three heavyweights in Russia’s tech industry: German Gref via Sberbank, Alisher Usmanov via Mail.ru and Megafon, and Sergey Chemezov via Rostec. 100% of Mail.ru’s class A shares will belong to these three companies. And as the government cements its stake in the second-largest company on the RuNet—collecting data on Russians’ social media (Vkontakte, Odnoklassniki), transportation (CityMobil), and eating (Delivery Club) habits—its independent competitor, Yandex, will face increasing challenges.
2.8 ​ ​The corona pandemic halted the growth of the insurance market in Russia
In 2016–2018, the Russian insurance market grew by more than 10% annually, but last year the growth was almost zero, partly due to tightened regulations. At the beginning of this year, sales of life insurance in particular grew rapidly again, but in April-June restrictions on movement and the economic downturn reduced demand for insurance. For the full year, growth is likely to be zero at best. At the same time, the amount of claims paid for non-life insurance has decreased, as a result of which the profitability of the sector has remained good. Industry anticipates that the coronary pandemic will increase the demand for voluntary health insurance in the coming years.
In Russia, the amount of statutory insurance is small and their share of collected premium income is less than 20%. Compulsory motor insurance (OCAGO) covers most of this. The most significant type of insurance is life insurance, which accounts for about 25% of premium income. The popularity of life insurance is partly explained by the low interest rates on bank deposits.
Despite the rapid growth of the last decade, the insurance market is still reasonably small. The sector's total balance sheet total at the end of June was 3,600 billion rubles, or about 3% of GDP. At the same time, the aggregate balance sheet of the banking sector was about 95% of GDP. According to central bank statistics, about a quarter of insurance companies' assets are invested in corporate bonds, 18% in public sector debt securities and 12% in bank deposits.
15 ​RUSSIA Country Report​ December 2020 www.intellinews.com