Russia Insurance Report Q2 2016
BMI View: Following a weak domestic economy and currency movements, Russia's insurance sector isexpected to recover from 2016 onwards - with double-digit growth in some of the non-life sub-segments. Itis important to realise, however, that any escalations in regional tensions or more extensive sanctions couldreturn the sector to a period of decline. Given that Russia's investment conditions will continue to improveover the coming years, we are optimistic to see multinationals' interests return and further feed into thesector's growth potential.
Key Updates And Forecasts
Both Russia's life and non-life insurance segments are expected to reap the benefits of economicimprovements from 2016 onwards, which will entail a rise in GDP and customer spending power.
Importantly, however, in light of high inflation rates and lower wages, customers may be less willing tospend their money on big ticket items such as motor vehicles and properties. While life insurance isreasonably concentrated, with 50% market share held by the top 3 players, non-life insurance is relativelymore fragmented with the largest 3 players securing a third of the market. Over the coming years, weanticipate a degree of market consolidation in both major segments; especially among the smallerinsurance providers.
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