How the COVID-19 pandemic influenced the demand for E-CMTPL policies

Electronic mandatory third party insurance coverage (CMTPL) and the pandemic. The demand curve for electronic policies.

The pandemic caused substantial adjustments in many areas of life. The sale of electronic policies began to spread widely before the start of the World Epidemic. Convenience, vehicle speed and, most importantly, registration from home is the attractive side of E-CMTPL (ОСАГО).

The Russian Association of Motor Insurers said: As a result of 2020, the proportion of electronic sales remained at the level of “before-covid” times – 50% of E-CMTPL certificates are still sold online. In this case, it means that the sale of E-CMTPL certificates through any sales channel, but in electronic paperless form.

The absence of quite reasonable during a pandemic growth of digital sales on the market is explained by the satisfaction of demand.

At the end of 2020, 17.8 million certificates for electronic CMTPL were sold in Russia. In the top 5 regions leaders in sales of E-CMTPL certificates were:

  • Moscow (1.6 million policies, 9.1% of all sales of electronic CTP in Russia),
  • Moscow region (950 000, 5.3%),
  • Sverdlovsk region (721 000, 4.1%),
  • Saint-Petersburg (520 000, 2.9%),
  • Samara area (510 000, 2.9%).

In  the Top-5 there is a pair of “toxic” (highly un-profitable, let’s say more politically correctly) from the point of view of regional insurers (where payments are significantly ahead of the fees):

  • Primorsky Kray (412 000, 2.9 %) and
  • Dagestan (338 000, 1.9%).

The leadership of the Russian Association of Motor Insurers highlighted that the pandemic strengthened insurance products issued online.

What is the Central Bank of Russia thinking about?

For the first nine months of 2020, 18.6 million certificates were sold in paper form, or 62% – and the discrepancy is too large to disappear in one quarter. At the same time, the statistics of the Central Bank, as well as the Russian Association of Motor Insurers data, do not show the growth in electronic CMTPL, which it was possible to expect in conditions of quarantine restrictions.

According to the Central Bank, in the first nine months of 2019, the share of paper certificates was 58%. According to the Russian Association of Motor Insurers, the discrepancy in statistics from the Central Bank is explained by the difference in data accounting. According to the information of the Association, in 2018, the number of E- CMTPL certificates sold increased 2.45 times compared to 2017 for the first time and was about 50% of sales (then the Central Bank introduced the obligatory electronic sales of the CMTPL for insurers). Igor Yurgens says that at this level the proportion of digital sales and keeps the last two years, “this is the real need for them”.

Yurgens also highlited that the share of car owners buying certificates online may rise slightly, after the online loss settlement.

The corresponding draft bill was tabled by the State Duma on December 16 in the first reading.

The gaps of E-CMTPL

According to current legislation, such a certificate cannot be printed. When a document is requested by a traffic police officer, it is enough just to show it in electronic format on the phone screen.

Some car owners say that when stopped by a traffic police officer, it is more convenient to provide a paper certificate as it reduces the communication time with the officer.

Therefore, as an exception, some insurance companies offer customers a delivery service to the house. However, this gap is very conditional. The traffic police officers calmly take printed electronic certificates for E-CMTPL to record cars and accept it when you show it on the screen of your smartphone. It has already been verified repeatedly, all the certificates are visible in a single base, including for the traffic police officers – department of interior affairs.

What the insurers want

Nevertheless, the insurers see the development of mobile applications for the full range of services, from the sale of certificates to adjustment of losses, as the main task of 2021.

The fact that all insurers of CMTPL are making the sale of certificates in electronic form obligatory is also reported by the Russian Association of Motor Insurers. Incidentally, you can calculate the price of a policy for CMTPL and even arrange it in the calculator right on our website.

For now, the largest insurers have already developed convenient applications to purchase certificates online, obtain an insurance statement, control the duration of the certificates, extend online, send requests to the insurance company to coordinate various types of services, as well as for the organization of self-inspection.

Some insurers (VSK, Soglasie) have already previously stated they will settle losses and receive online payment in the future. We will tell you about such services in more detail in separate reviews and articles.

In addition, an important milestone was a special application that we had previously written about in the article Assistant CMTPL (ОСАГО) with an accident of European Accident Statement: Instructions for use 2020. It was designed to simplify the settlement of losses under the European Accident Statement. However, his work has resulted in a number of complaints from car owners, which we will also write about on our website.

Summary of the above – several conclusions:

  • The share of E-CMTPL in 2020 according to the Russian Association of Motor Insurers was 50%, and according to the Central Bank of the Russian Federation – 42%, which the Association explained was due to a different approach to accounting
  • The proportion of electronic certificates for CMTPL has not changed during the pandemic period, although it was expected to grow to 60%, but confidence in the share of e-commerce in insurance is preserved at a high level;
  • This transformation into E-certificates encourages interest by insurers in developing mobile versions for the sale of certificates for both agents and end users (sites and mobile applications for smartphones);
  • Insurers see as an important task to fully automate the sales of certificates not only the CMTPL, but also other types;
  • Insurance companies began to implement a complete online loss settlement process, primarily for CMTPL (and partly by car types);
  • With the participation of the Association in 2020, an application for smartphones was introduced to resolve the CMTPL losses within the European Accident Statement – “Assistant OSAGO”, which is available on iOS and Android.

Briefly reporting about important and interesting topics in insurance – in the #BuzzStories heading!

 

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