Page 16 - RusRPTDec20

Russia's largest insurer is Sogaz, originally owned by gas giant Gazprom, which has a market share of almost a quarter in terms of premium income. Second and third are the insurance companies of Sberbank and Alfa Bank with market shares of about 12%. According to the data at the end of June, a total of 169 insurance companies were operating in the market, which is twenty less than a year earlier. Concentration in the sector is expected to continue this year as well. The ten largest insurance companies account for more than 70% of the total premium income in the entire industry.
2.9 ​ ​Russia shakes up its development agencies
After shaking up the government, Prime Minster Mikhail Mishustin is moving on to Russia’s development institutions. On November 23, Mishustin announced the long-awaited reform of Russia’s sprawling network of 40 development institutions. The basic idea is to eliminate inefficiencies by consolidating like organizations and ensuring that each institution works specifically toward achieving Russia’s national development goals.
The reform includes three components:
· An overarching development institution will be created within VEB.RF (formerly Vnesheconombank). Eight current organizations, including Rusnano, Skolkovo, and the Russian Export Center, will be transferred to this institution.
· Twelve sectoral development institutions, classified as “specialized,” will remain untouched. These include Rostec (military-industrial), Rosatom (nuclear energy), Roskosmos (space), Avtodor (highways), Dom.RF (housing), and two regional development companies aimed at the North Caucasus and the Far East.
· Eight institutions will be abolished, and the remaining will be consolidated. For example, the Agency for the Development of Human Capital in the Far East and the Arctic and the Fund for the Development of the Far East and the Arctic will be liquidated. The Russian Venture Company, meanwhile, will be transferred to the Russian Direct Investment Fund. The functionalities of abolished institutions will be transferred either to VEB or to the government.
What should we make of these changes? There are three points worth noting. First, it’s overall positive for Russia to reduce its number of development institutions from 40 to a couple dozen. Over the years, the government has adopted a bit of a “we have a problem; let’s make a development institution to fix it” approach, and it hasn’t necessarily worked.
Second, thus far, the reform has ignored the important question of personnel—with one major exception. Rumours that Anatoly Chubais would be leaving Rusnano turned out to be true. And while it is still unclear where
16 ​RUSSIA Country Report​ December 2020 www.intellinews.com