RUSSIAN REINSURANCE
MARKET DEVELOPMENT
Dmitry GARMASH
Deputy CEO
Unity Re Ltd.
FIAR, Sinaia, 2012
Market dynamics (FSIS), billion RUR
800
700
600
500
400
300
200
100
0
690
479
407
350
141
100
552
162
80
17
10
249
201
63
16
556
514
5417
285
4315
320
293
35
12
3512
2005
2006
2007
2008
2009
2010
2011
Insurance premiums
350
407
479
552
514
556
690
Insurance claims paid
141
162
201
249
285
293
320
Inward reinsurance premiums
100
80
63
54
43
35
35
Inward reinsurance claims paid
10
17
16
17
15
12
12
2011:
•Non-life insurance GPW
•Non-life paid claims
•Inward reinsurance GPW
•Inward reinsurance paid claims
23 bln USD.
10,6 bln USD
1,2 bln USD
0,4 bln USD
Inward reinsurance
120
100
89
94
101
80
80
63
54
60
43
40
20
10
14
11
17
0
2003
2004
-20
2005
2006
-20,8
16
17
15
12
35
10
0
2007 2008 2009 2010 2011
-14,3
-18,6
-20,4
-21,25
-40
GWP, bln RUR
35
Claims paid, bln RUR
Growth
Inward reinsurance market, 2011
•
Inward R/I 2010 – 1,2 bln $: 1st year of stabilization.
•
Classic risk business share – about 50%, i.e. roughly 0,6 bln $
•
Specialist reinsurers – up to 20-25% of total inward R/I GWP
•
Total number of reinsurance players in 2011г. – 133 (2010 – 152$
2009 – 176; 2008 - 196)
•
Total number of specialist reinsurers - 18 (2010 – 23; 2009 – 25)
•
Oligopolistic structure = quality!
•
Outward reinsurance – stability since 2010: ~3 bln USD
4
Factors of trending
• Stability of genuine risky reinsurance volume & absolute
amount of claims paid.
• Dumping and overall rates softening
• Rise of retentions & reinsurance protections
VS
• Market consolidation  better quality of services
• R/I business from overseas seeking alternative capacities
• Adaptation and correction of actual strategies
• Shifting retentions and capacities of R/I players
Market players
1600
1400
1397
1200
1280
1075
1000
800
600
918
751
698
537
400
389
200
0
857
713
55
49
41
321
28
251
29
196
26
176
24
608
152
23
495
133
18
2003 2004 2005 2006 2007 2008 2009 2010 2011
Total
Reinsurance players
Specialist reinsurers
Market players – Top-15 reinsurers
Rank
Company
GWP, ‘000 RUR
1
Ingosstrakh
3 301 962
2
Sogaz
2 712 672
3
Unity Re
1 281 649
4
Kapital insurance
1 229 881
5
Moscow Re
1 196 494
6
Allianz
958 706
7
VTB Insurance
914 943
8
Kapital Re
790 004
9
Soglasie
778 666
10
Transsib Re
739 997
11
Rosgosstrakh
685 730
12
SCOR Perestrakhovanie
601 657
13
Alfastrakhovanie
583 386
14
Russian Re
541 818
15
Military IC
496 373
Business from overseas
120
100
30
100,6
28
26,2
25
23,5
80,9
80
20
63,4
53,9
60
15,5
10,6
40
20
5,3
5,3
6,4
5,2
6,7
8,4
15
43
10,1
35
35
9,1
10
10
0
5
0
2005
2006
2007
2008
2009
2010
2011
Reinsurance premium, bln RUR
Reinsurance premium from outside Russia, bln RUR
Share
Business from overseas
60%
4%
16%
18%
2%
Grounds for growth
• Strengthening financial and technical capabilities of the
players!
• Rise of capacities, retentions and retro-programs
• Difference in leaders of retro- and reinsurance programs
• Globalization and active development of emerging
markets  demand for alternative capacity
• Further spread of brokers’ activities geographically
• Historically active cooperation with CIS
• No binding to world (re)insurance cycle
UNITY RE
A RUSSIAN REINSURANCE LEADER 2011
Milestones
• In 2004, renamed into Reso Re and started its active development within
the reinsurance market of Russia and CIS.
• In 2006, rebranded to Unity Re and also restructured to obtain more
high-qualified and experienced team to promote further as the specialist
reinsurance center of Group RESO and strategically the leading reinsurer
within FSU.
• In 2007, started operations in overseas markets, writing property,
construction and marine business from South America, MENA and SEA
regions.
• In 2007, was granted with the international financial strength rating of
‘BB-’ from Standard & Poor’s. It is maintained until nowdays with the
enhancement of the rating outlook from stable to positive.
• In 2010, Unity Re finally conquered the top position in the market, ranked
the first among the specialist reinsurers in Russia (over 1 bln RUR of
GPW)
• In 2011, A.M.Best assigned a secure “B+” rating, outlook stable, to Unity
Re.
12
Vision & mission
Vision
Developing to maintain the position of the regional reinsurance market
leader with Russia and FSU, providing the widest available scope of the first
class reinsurance cover and confident linked services from a position of the
absolute leading, financially stable, fast and attentive national reinsurer, and
gradually promoting overseas as the reasonable medium-size capacity market
player highly committed as a supporting reinsurer for the traditional lines of
business.
Mission
To provide a very fast response to cedants’ demands for a wide range of nonlife reinsurance lines of business with the first class growing capacity and
additional services; to support the clients with underwriting expertise,
confident and prompt claims settlement and relevant advisory; to rely upon a
stable, integral and solid team of professionals fully committed to company’s
performance and clients’ needs; to promote the status of a leading
Russian/FSU specialist reinsurer well known worldwide.
Highlights & competences
Leading specialist
Established team
Strong financial
performance
Strong capitalisation
Rated
Market
Leading
Regional distribution
Company
Corporate governance
Excellent operational
performance
Ranked 1st by reinsurance GPW among specialist
reinsurers in Russia & CIS in 2010 and 2011
Highly regarded & solid management team, stable
since 2006
Consistently profitable with strong underlying
growth. Results of 2011 (IFRS): net profit 7m US$;
LR 53.6%; combined ratio 78.4%; ROE 27%
Exceptionally capitalised with a very strong solvency
margin
Financial Strength Rating from a leading
international agency
Distribution across the whole of Russia and the
former USSR territories and overseas
IFRS audited accounts since year-end 2006.
Experienced Supervisory Board. Operating to
international standards
2011: GPW growth – 25%; market share 6%;
Renewal ratio – 87,7%; GPW per capita – 51,1 mln
RUR
Largest and most
stable clients’ base
370 companies from Russia, CIS and overseas
Brand
A recognizable brand with Russia/FSU; London
market; MENA region and SEA
14
Legal & compliance
•
•
•
•
The 100% shareholder of Unity Re is RESO Holding - one of the leading
insurance holdings within Russia & CIS.
Currently, the paid-up capital of Unity Re is 500m RUR (~16.6m USD)
The actual reinsurance license No. 1643 77 of 04.07.2007.
Since 2007, KPMG has been the official auditor of Unity Re for IFRS
financials.
International rating
Unity Re has the following actual international ratings assigned:
Rating
Outlook
Status
A.M.Best
B+ (Good)
Stable
Assigned: Sept 2011
Standard & Poor's
BB / ruAA
stable
Last mod. Aug 2011
Rating reports specially outline Unity Re’s:
• Good capitalization
• Profitability
• Strong position in the domestic market
• Very good level of retrocession protection
Portfolio 2011
The scope of Unity Re’s activities is classic reinsurance, where the company
offers coverage for all major lines of business: general property,
construction, energy and petrochemical, cargo, marine hull, aviation,
accident & health, liability.
4%
8%
11%
Property & engineering
Motor
Personal lines
Marine hull & cargo
Liability & Misc
58%
19%
Portfolio 2011
 344 (re)insurance and broking companies from Russia, CIS & overseas
 287 companies from Russia, inc. all players from Top-50 (a unique!)
 cooperation with all major brokers operating in Russia &
internationally
25%
20%
75%
80%
Treaty
Fac
Direct cessions
Brokers
Portfolio 2011
The major geographical scope of Unity Re’s business is focused at
Russia & CIS.
Additionally, since 2006, Unity Re has intensified its activities in
overseas markets, writing business from South-East Asia, Central &
South America and Africa.
12%
17%
Russia
CIS
Overseas
71%
Largest paid claims 2006-2011
Amount paid,
USD
Year
Cedant
Class
Comment
2 500 000
2010
SOGAZ
Property
Fire at a refinery
656 000
2007
Renessans insurance
Property
Furnace explosion at Azovsteel plant
585 000
2010
AzRe (Azerbaijan)
Marine
Crash of a motor yacht
550 000
2010
ROSNO
Property
Explosion at Sayano-Shushenskaya HPP
465 000
2008
Spasskie vorota
Property
Fire at a business center
430 000
2010
MIC
Property
Fire at a food factory
335 000
2007
Energogarant
Property
Fire at Reftinskaya hydro power plant
315 000
2009
Military Insurance Co.
Property
Crash of a train
260 000
2007
Renaissance insurance
Property
Fire at a plant
230 000
2009
Spasskie vorota
Marine
Loss of cargo washed from deck
175 000
2009
Sogaz
Aviation
Crash of aircraft during lending
170 000
2008
Sogaz
Property
EQ at Sakhalin
155 000
2009
Soglasie
Marine
Damage to a vessel by grounding
128 000
2007
Standard-Reserve
PA
Accidental death
125 000
2010
Asuransi Jasa (Indonesia)
Property
EQ
116 000
2008
Ard Daatgal (Mongolia)
Property
Storm damage to residential property
Capacity 2012
LOB
Maximum
line - Net
retention,
PML basis
Maximum line
Gross retention
Property
(FAP/PAR/IAR)
USD 1,000,000
USD 50,000,000 (for business from Russia/CIS – XOL
treaty)
CAR/EAR
USD 1,000,000
USD 50,000,000 (for business from Russia/CIS – XOL
treaty)
Energy off-shore
USD 1,000,000
-
Marine hull / P&I
USD 500,000
USD 7,000,000 (worldwide, XOL treaty)
Cargo
USD 500,000
USD 7,000,000 (worldwide, XOL treaty)
GTPL
USD 500,000
-
Aviation
USD 500,000
-
Motor
USD 250,000
-
Personal
accident
USD 200,000
USD 1,500,000
Contacts
125047, Russian Federation, Moscow,
Gasheka st., 12
Tel.:
Fax:
+7 495 956 6589
+7 495 956 6598
E-mail:
[email protected]
www.unityre.com