Gregory Ignatenko Director of ZAO GUTA-Strahovanie Auto Business Insurance Front Office
— Legislation on MTPL is often changed. Since the second half of 2008 an active work on the MTPL system change was has been carried out. In July, 2008 it was planned to introduce direct settlement and ‘European Protocol’. But at that time the insurance market was not ready for such changes. As a result, a decision about shifting the date of direct settlement and ‘Europrotocol’ to March 1, 2009 was made.
Insurance companies faced the established system of direct loss settlement and ‘Europrotocol’ at the same level of readiness and now all insurers suffer the same difficulties. In particular, a question about who falls under the power of the new law on MTPL is still unsolved. Can all insurants receive direct settlement and a possibility to formalize a road accident without STSI or only those who purchased MTPL policy after March 1, 2009? Insurers works under the new terms with those who purchased MTPL policy after March 1, 2009, and the RF Ministry of Finance insists that the new regulations should fall upon all policy owners.
Besides it insurers were to meet a number of compulsory requirements for operating in the system of direct loss settlement and ‘Europrotocol’, such as, to place money on security deposit in the bank. Not all companies were ready to work under the new terms. As a result, a part of them are now being deprived of licenses for insurance activity and their financial liabilities are being charged upon Russian Association of Motor Insurance. Federal Insurance Supervision service is now afraid of increase in a number of complaints by insurants. The major reason for clients’ dissatisfaction is related to many insurers going out of the market and leaving behind unsettled debts to insurants.
We’d like to remind, that now the insurance forum of MTPL HSS Information and Advertisement Center is operating, on which points at issue in MTPL are discussed. Here all insurants can get qualified legal support on MTPL.
In spring 2009 changes in the law on MTPL spread on insurance tariffs as well. An issue about change in territorial tariffs became actual long ago. MTPL loss rate data analysis in different regions of the country proved the necessity for correction of insurance tariffs dependently on the territory of a vehicle use. Territorial coefficient increased, in particular, in Kazan, Nizhny Novgorod, Chelyabinsk, Murmansk and some other cities. In Moscow, Saint-Petersburg and in Moscow and Leningrad regions coefficients remained unchanged.
Price dumping is unlikely to bring about any positive results. Moreover, it can complicate financial positions of insurers, employing this measure. Today MTPL is close to lossmaking kind of insurance. discounts for MTPL policies can evoke certain doubts about reliability of companies.
Necessity for increase in insurance tariffs is evident at the present time. To correct MTPL loss rate it is necessary to raise base tariffs, at least, by 10-15 %.
As for our results in 2008, GUTA-Strahovanie grew the volume of MTPL insurance premium by 45 %, as compared with 2008, to 696 mln. roubles. At the same time, indemnity payments grew by about 48 %, as compared with 2007, to 384.6 mln. roubles.
In the future we expect increase in insurance premiums in the MTPL segment. But it will not be as significant as it was, for instance, in 2007. GUTA-Strahovanie actively raised an insurance portfolio in this sector. New cars are purchased despite the crisis. So forth, through MTPL for individuals and corporate fleet insurance we plan to increase the MTPL share in the structure of the insurance portfolio.
