INSURERANCE COMPANIES BEAT THEIR 5-YEAR RECORD ON PROFITS

HomeNewsINSURERANCE COMPANIES BEAT THEIR 5-YEAR RECORD ON PROFITS

Insurance companies set two profit-related records in 2018 , both in terms of volumes and growth. Good performance was facilitated by the growth of life insurance sector, as well as the stabilisation of car insurance market.

Profits after tax of the Russian insurers increased by 96.3% in 2018, and amounted to 164.9 billion Roubles. This follows from the review of key indicators of insurers published by the Bank of Russia. This is a record growth and the best indicator since 2013, according to the CBR data. Profit before tax reached 204.1 billion Roubles showing a 69.3% growth.

The CBR explains this growth of profit by an increase of income from the investment programmes run by the insurance companies, as well as by a decrease in losses and expenses in the car insurance segment. Due to the growth of life insurance policies, the reserves of insurance companies investing in various assets have significantly increased by 52% reaching RUB 885 billion. As a consequence this led to an increase in the investment interest, which in turn brought up the profits of the insurance market.

Given the record profits, the return on equity of insurance companies reached a maximum over the last 2.5 years: 31.2% (or an increase of 9.3% over the year. According to the last year's results, the insurance market grew by 8.4%, even without taking into account the life policies, against a decrease of 1.8% in 2017. This is the highest growth over the past six years, the CBR reports.