As part of the open, ongoing seminar of the Young Risk Manager Laboratory, the Association of Risk Management “Russian Risk Management Society” (RusRisk) and the MGIMO Department of Risk Management and Insurance held the eighth meeting and discussed with professional experts current issues of mutual insurance in Russia and in the global insurance market.
The seminar moderators, Andrey N. Elokhin, First Vice President of RusRisk, Corresponding Member of the Russian Academy of Natural Sciences, and Prof. Kapitolina E. Turbina, Head of the Department of Risk Management and Insurance, specifically noted that in the current situation, with insurers’ opportunities constrained by limited access to the reinsurance market, the demand for mutual insurance, as a tool for managing policyholders’ risks across various industries, is becoming a significant alternative to traditional insurance within corporate risk management.
Igor N. Zhuk, President of the National Association of Mutual Insurance, noted that in recent years the number of mutual insurance societies in the Russian insurance market has been steadily increasing, despite restrictions in the mutual insurance law. “The MIS segment is actively developing under today’s challenging conditions. The number of operating MISs increased to 21 in 2023. For more than two years, the consumer mutual insurance society ‘RT‑Mutual Insurance,’ formed by 258 enterprises of the State Corporation Rostec, has been successfully operating.”
In Yekaterinburg, an MIS for transport organizations has been operating sustainably. In St. Petersburg, three MISs with different specializations are active — from auto insurance to professional liability insurance. Corporate policyholders have begun considering the possibility of managing their own risks, including through the creation of MISs. In Moscow, an MIS for cargo insurance and shipowners’ liability is developing successfully. In the Volga region, an MIS insuring the interests of cooperative agricultural producers has long been operating successfully. The topic of mutual insurance is being discussed more widely in the public sphere — at various conferences and seminars, and is reflected in the media.” However, the persisting restrictions on the number of MIS participants and on establishing MISs for lines of compulsory insurance and personal insurance are regarded by market participants as obstacles to the use of mutual insurance.
Prof. Kapitolina E. Turbina devoted her presentation to an analysis of mutual insurance in the global insurance economy (presentation attached). The role of mutual insurance in the global insurance market remains consistently high both in life insurance and in property insurance. In 2022, the share of mutual insurance in total gross written premium exceeded 26.2%, and premium growth rates in the segment over the past 10 years were 10 p.p. higher than in commercial insurance. The assets of mutual insurance societies exceed USD 10.4 trillion, and the number of MIS participants worldwide is over 1 billion (legal entities and individuals). In developed traditional markets, the role of mutual insurance is significantly higher and exceeds 32%, while in the main emerging markets — China and India — it barely exceeds 1%. In certain European countries — the Netherlands, Finland, France, Spain, and Germany — the share of mutual insurance exceeds 46% of gross written premium, which indicates the growing importance of MISs, especially amid rising insurance rates during the current phase of the global insurance market’s economic cycle.
The key speakers representing mutual insurance societies were Igor N. Egorov, Risk Assessment Director at the Non‑Commercial Corporate Organization “Consumer Mutual Insurance Society ‘RT‑Mutual Insurance’” (NCO CMIS “RT‑Mutual Insurance”) of the Rostec MIS, and Oleg V. Tronev, a Board Member of the Non‑Commercial Corporate Organization “Consumer Mutual Insurance Society ‘Insango.’”
Rostec MIS — NCO CMIS “RT‑Mutual Insurance”, established in 2021, is the largest mutual insurance society created by 248 organizations within the perimeter of the State Corporation “Rostec”. As of April 1, 2023, MIS assets exceed RUB 1.0 billion, and obligations are secured by a financial guarantee from the State Corporation “Rostec”. The main task is to ensure the prompt resumption of production after insured events by advancing expenses for restoring damaged property, without accounting for operational depreciation. As mutual insurance develops, risk rating increasingly focuses on assessing each MIS participant’s individual risk, fire safety, occupational health and safety, environmental management, and the specifics of participants’ technological processes. The MIS is working on building a digital model for risk assessment and prevention based on aggregated data from the Department of Industrial Safety and Fire Safety, and on the evaluation of residual risk after insurance contracts are concluded. The conditions of mutual insurance, tailored to participants’ needs, also include losses resulting from the fall of aircraft (including UAVs). Reinsurance with RNRC also plays a significant role in ensuring the MIS’s financial stability.
Oleg V. Tronev focused on the key insurance lines of CMIS “Insango”, established in 2022, and on the features and advantages of insurance under mutual risk bearing. In particular, co‑insurance and reinsurance of risks involving “Insango” enable major Russian clients and insurance companies to assume risks through concessions for clients sensitive to sanctions risks, while allowing non‑sanctioned insurers to minimize exposure. At the same time, the organization’s Insurance Rules contain no sanctions clauses. “Insango” is the first MIS in the Russian Federation, providing services for marine cargo insurance, vessel hull (CASCO) insurance, and shipowners’ liability. Its organizational and legal form — a mutual insurance society, reduces sanctions exposure for all parties to the transaction: shipper, consignee, shipowner, freight broker, lending bank, etc.
Bachelor students in their 3rd and 4th years, specializing in “Risk Management and Insurance,” took an active part in organizing the seminar and the discussion.
More than 50 experts and specialists from surveying, valuation, and adjusting companies, professional market participants (insurance companies, brokers), as well as representatives of leading Russian industrial companies (PJSC LUKOIL, PJSC MMC Norilsk Nickel, and others) took part in the seminar.
All presentations sparked great interest and numerous questions from participants. The undeniable success of the discussion is evidenced by the fact that, after the seminar ended, participants continued their discussion in an informal setting.
A link to the seminar recording is attached.
