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    HomeRussiaRostec avoids unnecessary risks // State corporation expands insurance business

    Rostec avoids unnecessary risks // State corporation expands insurance business

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    The Mutual Insurance Society (OVS), which is part of the Rostec state corporation, plans to significantly increase the size of its business, both by expanding the available types of insurance, and at the expense of members of the society. Experts note that this development is due to the unwillingness of third-party insurance companies to take on the risks of companies that are part of the state corporation, as well as the need to maintain the confidentiality of information about their activities. However, OBC may require additional support through reinsurance or state corporation guarantees in the event of major risks.

    OBC RT-Mutual Insurance (part of the Rostec Group) has received a license to carry out eight types of mutual insurance. The now available enterprise property insurance was supplemented with liability insurance for officials, information systems against cybercrime, construction and installation risks, cargo transport insurance, etc. In addition, it is now planned to increase the number of members of the society at the expense of other enterprises that are part of Rostec.

    At the same time, according to him, according to the OBC law, it is forbidden to engage in compulsory types of insurance, life insurance and personal types of insurance.

    Taking into account the fact that the current legislation limits the number members of the OBC 500 legal entities, the next stage will be associated with a change in the law on mutual insurance – “both in terms of removing restrictions on the types of insurance, and on the number of members,” says Mr. Galushin.

    Experts name several reasons for the expansion directions of business of OBC Rostec. Aleksey Yanin, managing director for insurance ratings at Expert RA, believes that the company is doing this in order to be able to provide its members with more comprehensive insurance coverage.

    The tariff may be the same as that of a commercial insurer, but in the case of an OBC, the funds remain within the insured, which lays the foundation for future tariff easing, the expert explains.

    Evgeny Sharapov, director of ratings of insurance companies of the NKR agency, adds that the main advantages of the OBC are the quick settlement of losses, as well as the confidentiality of information about the activities of enterprises, which is especially important in the context of sanctions. According to another Kommersant source in the insurance market, the annual increase in fees could reach 30%.

    Meanwhile, experts warn that additional support is needed for the development of OVS. According to Mr. Sharapov, most likely, it will be impossible to build a balanced insurance coverage for enterprises without acquiring reinsurance coverage or state corporation guarantees. Tatyana Nikitina, senior director of ratings for financial companies at the NRA, notes that the subsidiary liability of members of the company in the event of a very large loss may lead to the need to make additional contributions. However, the expert clarifies, even taking into account the fact that risks accumulate within one structure, with a sufficiently large number of participants and competent risk management, including in terms of reinsurance, the risks for members of the OBC do not fundamentally differ from the risks when working with an external insurer.

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