What is expected by the mutual insurance society in 2022 – an interview with an expert
We managed to discuss with the head of the International Export and Import Center, a member of the Expert Council of the НАВС, a member of the Supervisory Board of RNPK Zhuk Igor Nikolayevich. Earlier, I.N. Zhuk worked in senior positions in insurance companies (LLC “SK” Soglasiye “, PJSC SC” Rosgosstrakh “) and was the head of the Department of Insurance Supervision of the Bank of Russia.
Currently, Igor Nikolaevich is a head of an initiative group on the implementation of the new vector in insurance – the development of mutual insurance societies.
– Igor Nikolayevich, thank you for participation. In our opinion, aside, on the backyards of the insurance market, there remains an undeservedly forgotten theme that could give a real impetus to the development of market insurance. These are the society of mutual insurance. And the first question: what do you think prevents the development of this area?
– Let’s start from the very beginning. I would like to decide on real market drivers. I’ll a little argue on the topic, but it will be important.
The insurance market now has its own development dynamics. There are motor insurance (fully comprehensive insurance and third party liability insurance), there are topics related to life insurance, and so on. Questions that occur in the market are solved in the evolutionary plane. Everything is quite predictable. The tariff for the third party liability insurance will be free. I do not know when, but it will be. When we were engaged in this 20 years ago, I thought that liberalization would take 5-7 years. And about 18 has already passed – until it turned out.
The same applies to the development of life insurance, when, it is obvious that misselling should be excluded and it is necessary to develop products. Now it comes to the point that people really buy not what they need. You can not earn money on the introduction of the consumer.
The phrases that “insurance is not bought, but for sale”, which is important to sell – this is a movement not to the development of insurance. We know that there are many intermediaries (there used to be car dealerships, then banks, etc.) that solve their tasks. But conceptually, the development of insurance is based on consumer confidence in the insurance company, the transparency of the relationship of the insured and the insurer, in the economic interest of the client in insurance products.
We with group of experts believe that mutual insurance should be one of the market drivers, when the interests of the insurer and the insured are united. The main and only interest is insurance protection. Insurance in itself – ensuring confidence. Insurance at home is the maximum transparency, the absence of parasitizing intermediaries. Now there are many conversations about the consumer value of insurance. Mutual insurance is one of the options to make our insurance market more dynamic in development. We do not come up with “zero” – on the global insurance market at least one third of the contributions fall on mutual insurance societies. In Russia, there are practically no mutual insurance market. At the same time, commercial insurers at the moment are not in a hurry to insure numerous risks of liability insurance, sanction stories, environmental and many other risks. Already now mutual insurance can complement commercial!
Mutual insurance in Russia is hampered by legislative restrictions and unfavorable business environment. Little information about the benefits of mutual insurance, there are no incentives for the development of mutual insurance societies.
– What types of insurance can be engaged in mutual insurance societies in the Russian Federation, and what is the world practice?
– Now mutual insurance societies in Russia can insure property and responsibility.
The Bank of Russia presents its development directions for 3 years, and the Ministry of Finance – for 10 years. It would be important for us that the positioning of mutual insurance was marked. To clear it, this is a situation that requires increased attention and efforts of many parties.
If you look at the world picture, on historical experience (even Russian), we see that the topic of mutual insurance societies resolves a number of issues and in the value of insurance, and to engage in the population, etc. Therefore, we would like to accelerate not so much how much to create civilized conditions for mutual insurance societies. In many countries, mutual insurance companies bring more than half of all insurance premiums in the market. Moreover, in Japan, for example, almost 90% of all life insurance fees are held through mutual insurance societies, the entire industry of Sweden works with mutual insurance.
Therefore, now everything that our working group does, is engaged in the formation of a favorable environment for the development of mutual insurance societies. We form it in two directions: we remove destructive limitations and support the demand on the topic of mutual insurance.
– What legislative restrictions are there now?
– First of all, a restriction of numbers and types of insurance.
mutual insurance societies has a limit on no more than 500 legal entities and 2000 individuals in the spheres of insurance of responsibility and property. Now we need to talk about the discriminatory position of insurance companies in relation to mutual insurance societies. it is impossible to limit the number of customers in insurance.
In addition, it requires solving the task of proportional to regulate the activities of mutual insurance societies, taking into account the specifics of mutual insurance. For example, in foreign practice mutual insurance societies, which ensure the compensation of damage inside the closed contour of the participants, the financial stability of the Company is determined by non-regulatory requirements, and the subsidiary responsibility formed by the Company and the obligation to carry.
– Why do we have less than 2 dozen mutual insurance societies?
– The answer is simple – legislative restrictions and unfavorable environment for the development of mutual insurance societies. We need successful precedents for examples of mutual insurance. There was an example in Russia. It is not multiple, and even has a different attitude due to the topic – developers. If you carefully look deep into, then the developers had a good experience of the insurer – “reputable developers” when the risks were insured within the professional environment. There was a self-regulation. At the same time, when it all ended, the reserves were transferred to the structure of the DOM RF, and more money was preserved, which were not needed, because the form disappeared and there was no need to form a warranty fund. Now mutual insurance societies appear not due to, but in spite of the environment.
– What are the minimum requirements for mutual insurance societies? Do you need authorized capital?
– To create an mutual insurance societies, three legal or five individuals are necessary. It is necessary to prepare the appropriate package of documents for licensing in the Bank of Russia. Important stages in the creation of mutual insurance societies are the analysis of the system of risk management of the future mutual insurance societies, the formation of a business plan, holding the general meeting of the founders of mutual insurance societies, registration actions, the development of insurance conditions, payment of entrance fees. Capital is not required, the guarantees of ensuring the financial sustainability of mutual insurance societies are: economical grounds of insurance rates, insurance reserves, reinsurance, warranty funds, additional contributions. Once again, it should be recalled that the members of the mutual insurance societies carry subsidiary responsibility for insurance liabilities.
Unfortunately, some important principles of mutual insurance are not taken into account, often the need for authorized capital. It should be remembered that the presence of authorized capital, however, has not saved thousands of banks and insurance companies from bankruptcies.
Mutual insurance societies can insure not only their members.
– Can mutual insurance societies work on mandatory species? Are there any prospects for a work permit on them?
– Now the mutual insurance societies has a limit on insurance: they can’t participate in life sector. Only property and responsibility. The law of 2007 year was more restrictive development than the developing mutual insurance societies.
World experience shows that mutual insurance societies work successfully in a wide variety of spheres. Expert estimates at 2020 on mutual insurance account for 30% of the total collection of insurance premiums at 6.1 TRL. US dollars.
In our opinion, the application of the mechanism of mutual insurance during environmental risk insuring can be very effective. NATIONAL ASSOCIATION OF MUTUAL INSURANCE prepared a proposal for the development of compulsory environmental insurance by adding an “ecological section” in No. 225 Federal Law.
– In which areas and industries will the mutual insurance societies be demanded?
– Mutual insurance mechanism can now address large vertically integrated business structures (June 24, 2021 the State Corporation “Rostech, the founders of which were 258 organizations, received a license of Mutual Insurance), professional associations (arbitration managers, tour operators, doctors, etc.), agricultural producers, for property insurance against emergencies, associations of volunteers for life and health insurance, and many others.
Of course, point changes in the relevant laws may be required.
For residents of the cottage settlement make mutual insurance societies should be easily. They will be able to save on insurance. It is important to remember that the regulatory system must be adequate. It is easy to make a control system controller. But then the service will be expensive for the consumer.
By insurance within himself, we remove unnecessary loads and let it make it more affordable. It will be one of the drivers to involve people.
It is still very important: if we are talking about insuring inside the contour of the members of the mutual insurance societies, then the money can be involved, which are not consistently present. Because if the client, when commercial insurance, you need to pay a premium, and it disappears when it disappears for him as an insurer, then for many, the question of the feasibility of insurance for the next period arises. And if I am fully inside an mutual insurance societies, I can pay 50% of the money premium, and 50% – guarantees. Why it is necessary to distract real money from business, when I have all necessary inside with the need to pay in case of an event.
– What is important to make that this mechanism really start working?
– The main issue is related to the lack of information and culture of mutual insurance. We work: together with deputies, departments, interested enterprises, we correct legislation. We help to form the demand and provide methodological assistance to the created mutual insurance societies, carry out the analysis of new areas to apply mutual insurance.
Another important point with the responsibility of insurance. mutual insurance societies is a separate elegant opportunity to work on the self-regulation. Everyone knows each other, all standards are observed. If the problem comes with the need to pay, everyone is subject to solidarity. In terms of self-regulation, this moment is underestimated.
– How does the Association work and what tasks is set to?
– National Association of Mutual Insurance has been working for more than 20 years. The main tasks are now – to change the existing legislation in terms of restrictions on the number of activities, assistance in the formation of a positive image of working mutual insurance societies, the formation of standards of activity that ensures a high level of financial stability and an active increase in interest in mutual insurance.
– Will a positive role will play legislative changes under the law on mutual insurance societies? If so, what will this give the market?
– After the adoption of the amendments, it will be possible to create an mutual insurance societies in a wide variety of areas. In addition to commercial insurance, new mutual insurance societies will appear in addition to commercial insurance – new insurance money.
– What are the amendments to the law or register acts to make a real market to appear in the Russian Federation?
– The amendments were all prepared in March of the current year. Three State Duma deputies signed a bill: Nikolaev N.P., Reznik V.M. and Aksakov A.G. In early November, the first reading was held, the second is now being prepared. The preparation of the second reading can be climbed into the ideology, perhaps a long discussion. If we talk about the removal of restrictions on the number of people, then all “for”. Add risky life insurance is all “for”. But if you take, for example, the topic of prohibition for OVS to insure the risks of responsibility – there is already a discussion. I assume that the number of disagreements on the bill will be known in December. Then we will look at what to do. The main thing is to stand on the position of the insured, protect the interests of potentially victims.
– What results can be tested for 2021?
– In 2021 we expect about 600-700 million rubles of insurance premiums from mutual insurance societies. According to my assessment, the order of half of this amount is the mutual insurance society “ROSTEKH”. In fact, a key point: amendments to the law after 14 years are made, they passed in the first reading. Also appeared an initiative group in our face, which is everywhere with these topics promotes. We wrote dozens of letters in different self-regulatory organizations, organizations. We started changing the environment. The active insured person involved in insurance is the most stable source of insurance premiums.
– What can you expect from 2022?
– The main thing is to get an improved law that does not kill the development of mutual insurance societies. Now our goals are: not to worsen the situation under the law; Make so that there is a steady demand for mutual insurance; Assist in the creation and work of new mutual insurance societies.
Igor Nikolayevich, the editorial office of the analytical resource Calmins.com expresses you thanks for this conversation and interesting information, and also wishes success in the implementation of the tasks set! Any competent and worked initiative is the positive impact to the insurance market.
Sergey N. correspondent specifically for Calmins.com: