The Russian reinsurance market is becoming increasingly attractive to Western companies. Vitaly Arkhangelsky, general director of the maritime insurer SkanMarinConsulting, made the assertion at a press conference here Monday. He said that, in the aftermath of September 11, foreign insurers and reinsurers raised their rates and thus shifted attention to less costly eastern and Asian sources. While the overall reinsurance market is down, Russian reinsurance companies have held their volume at previous levels.
'There are 15 to 20 giant, principally Moscow-based reinsurance companies in the Russian reinsurance market. Each of these companies is able to offer insurance protection, on average, of USD 3 million to 7 million (SkanMarinConsulting's average risk is USD 10 million), part of which is reinsured abroad. At present, approximately 90% of major insurance risks are reinsured abroad, with only 10% reinsured in Russia,' Arkhangelsky said.
He attributed the growing attractiveness of the Russian reinsurance market to several causes. First, the profitability of investments is much greater (earnings up to 25% are possible in Russia, where profits of 2%-3% are the rule in the West for analogous operations); second, labor and other overhead costs are low-all of which makes it possible to obtain reinsurance protection much more cheaply in Russia.
'The attractiveness of the Russian market is also a reflection of the rapid growth in capacity and the appearance of big players, such as Ingosstrakh, Rogosstrakh, SOGAZ, Soglasiye. On the other hand, Russian firms don't have the long-established reputations of the London companies, and this holds down the rate of growth in this sphere,' said Olga Lukina, the vice general director of SkanMarinConsulting.
The maritime insurer SkanMarinConsulting is the lead company of Group Oslo Marin holding, which started operations in Saint Petersburg in 1997. It is a subsidiary of the giant Norwegian insurance brokerage Oslo Marine Consulting. SkanMarinConsulting registered as a maritime insurer (N410) on March 14, 2001, with the Finance Ministry of the Russian Federation. At present, in addition to SkanMarinConsulting, the holding includes the health insurer, Medstrakhkom, the investment company Scandinavia, the Scandinavia pension fund, and the Maritime Sport-Health Centre.