Russia’s maritime, aviation and transit (MAT) insurance industry is expected to grow at a compound annual growth rate (CAGR) of 3.7 per cent between 2020 and 2025, according to data analytics firm GlobalData.
The growth is expected to be driven by the resumption of international travel, as well as increases in oil exports. It follows a steep 6.9 per cent decline in the sector in 2020 due to the imposition of pandemic-related border closures and travel restrictions. Despite this, MAT insurance still accounted for 20.3 per cent of Russia’s general insurance gross written premium (GWP) that year – making it the second largest MAT market in Europe.
Russia’s personal accident and health (PA&H) insurance sector is also forecast to grow significantly until 2025, with an expected CAGR of 6.1 per cent. The sector, which comprises a third of the country’s general insurance GWP, previously experienced a reduced growth rate of just 3.1 per cent in 2020 due to lockdown restrictions. However, PA&H since experienced a significant recovery in Q1 2021 following the introduction of new benefits for group health insurance policies by many insurers.
General insurance to reach $19.3 billion by 2025
The buoyant projected CAGRs of these sectors reflects wider growth across the Russian general insurance industry, which GlobalData projects will reach a value of US$19.3 billion by 2025.
Combined growth in gross written premium (GWP) for the industry is expected to rise from $16 billion in 2020 to around $19.3 billion in 2025, representing a compound annual growth rate (CAGR) of 4.9 per cent. The rise will restore the health of an insurance industry which has experienced slow growth since the onset of the coronavirus pandemic.
According to Ashish Raj, an Insurance Analyst at GlobalData: “We are seeing clear indications of a Russian revival in 2021, with the country’s economy expected to grow by 4.1 per cent by the end of the year as it benefits from rising oil and energy prices.”
He adds that in addition to government policies in Russia which are favourable to insurance providers, the economic recovery will encourage more people to travel, leave the house for work or leisure (inviting higher risks of injury), or make property purchases – all actions which would encourage individuals to purchase insurance policies.