Page 17 - Insurance Times Octoberr 2022

Russian life insurance in- ance industry has been significantly Ingosstrakh where it owned 38.5% of
impacted with high inflation and wors- the shares, and closed down its Russian
dustry forecast to decline
ening trade and economic conditions. division of Europ Assistance. Allianz
by 7.3% in 2022 as Ukraine GlobalData estimates that Russian Group has also announced plans to sell
GDP will contract by 12.3% and infla- its Russian operations to Zetta Insur-
conflict continues to im-
tion will remain above 15% in 2022.” ance.
pact economy
To curb the country’s high inflation the Prasanth adds: "GlobalData expects
The economic impact of global sanc- Central Bank of Russia (CBR) first in- Russia’s life insurance industry growth
tions placed on Russia following the
creased its benchmark interest rate to to remain subdued over the next few
country’s invasion of Ukraine, will de-
20% in February, and then reduced it years as further economic and disrup-
celerate the growth of the country’s
to 8% in July as inflation eased due to tive headwinds are anticipated result-
life insurance industry over the next
a strong Ruble. Higher than expected ing from the Ukraine conflict.”
few years, found GlobalData. Accord-
interest rates have made bank depos-
ing to the leading data and analytics
its more attractive compared to in-
company, life insurance gross written Insurtech investments fall
vestment-linked life insurance (ILI)
premiums (GWP) in Russia are ex- by 79.6% in 2021 leading
products, one of the major drivers of
pected to decline by 7.3% in 2022 com-
life insurance growth in the country. to job losses and tough
pared to the 21% growth achieved in
Furthermore, restrictions on investing
2021. economic conditions in
in foreign bonds due to sanctions has
‘Russia Life Insurance: Key Trends and
led to a decline in demand for ILI prod- 2022
Opportunities to 2026’, reveals that
ucts which is expected to continue into With several leading insurtech start-ups
life insurance GWPs are forecasted to
2023. providers going bust or cutting staff,
record a low compound annual growth
rate (CAGR) of 3.1% over 2021-26 com- Prasanth continues: “As a result of all the COVID-19 pandemic and cost-of-
pared to the 11.5% CAGR seen during this market disruption, M&A activity is living crisis are having a massive impact
the period 2017-21. expected to increase as insurers' in- on the global insurtech industry, with
vestment opportunities are limited and leading data and analytics company
Katam Prasanth, Insurance Analyst at
smaller, with less capitalized compa- GlobalData finding that investments
GlobalData, comments: " Russia is one
nies predicted to merge with the larger into insurtech have fallen significantly
of the few countries where the life in-
players in order to stay afloat.” in 2022.
surance segment recovered quickly
from the impact of the COVID-19 pan- Many foreign insurers have announced Deals Database reveals that the value
demic. However, as a result of the plans to exit the Russian market alto- of global investments into insurtech fell
country’s invasion of Ukraine and the gether. Prominent amongst them is by 79.6% in 2021. This follows a consis-
consequent imposition of heavy sanc- Generali who closed its representative tent flow of stories of insurtechs strug-
tions, Russia’s economy and its insur- office in Moscow, withdrew from gling in 2022. The most recent is Lem-
The Insurance Times, October 2022 17