Perhaps the first and main conclusion is that the law is in effect. Despite the fact that it was difficult and belatedly to approve tariffs in the government, as the relevant law was discussed and adopted in the State Duma, insurers managed to quickly deploy the necessary infrastructure for the sale of policies and to establish a system for servicing clients and victims of road accidents.
I do not want to be unfounded. According to a study that we conducted in October in 13 million-plus cities, the vast majority of car owners are satisfied with the quality of service for resolving losses. In 30% of cases, road accident participants did not involve an insurance company in resolving the consequences of the accident, the remaining 70% turned to insurers. Of those who managed to determine their attitude to services in the insurance company, 64% expressed satisfaction with the quality of service.
This figure means that Russian insurers have successfully overcome the first stage of the CTP insurance law. And today they are faced with the task of improving the quality of customer service and improving the quality of the product itself.
Some more statistics. According to our data, the number of Russian car owners who purchased OSAGO policies in October reached 93% (in June this figure was 91%). This indicates a high degree of coverage with compulsory insurance and confirms that “auto citizen” has become an integral element of ensuring road safety.
Before the introduction of OSAGO, experts predicted that the coverage of car owners with this type of insurance after a year of operation of the law will be 70–75%. The fact that these indicators reached 93% is explained, firstly, by the growth of incomes of our citizens over the past year. The purchase of an insurance policy for the vast majority of car owners today is well within the family budget. Secondly, this indicates that the growing middle class in our country is not evading the implementation of the law. Compliance with rules and norms becomes a form of self-affirmation for its representatives.
No matter how many critics of the law on compulsory motor third-party liability insurance say that this is a “bungle”, it’s enough to listen to those who have experienced traffic accidents over the past year and a half to understand that the law is of real benefit. It becomes more and more obvious that compulsory motor third-party liability insurance is a social mechanism that allows making relations on roads more civilized and financially protecting victims. It is important that during road accidents, its participants are increasingly resorting to resolving issues, to put it mildly, with uncivilized methods, including “force” ones. The number of gross “set-ups” that motorists suffered from was significantly reduced.
The injured - both car owners and pedestrians - began to receive compensation for the damage caused not only to the car itself, but also to health.
One of the important achievements of the law is that today the majority of car owners who have purchased OSAGO policies do not regard it as a piece of paper that allows them to perform formal procedures in the traffic police, but as a financial document. Accordingly, the approach to evaluating the insurance company that services this contract has changed.
I think that the strengthening of control over the availability of a policy by traffic police inspectors is beginning to play its role. It will probably be appropriate to say that the number of Russian car owners insured under compulsory motor third-party liability insurance has almost reached its maximum.
And finally, one of the important results of OSAGO was the general rise in the insurance culture of the population. This is undeniable. According to our studies, 70% of car owners are ready to renegotiate OSAGO agreements in their companies (and for Rosgosstrakh this figure is 85%). This means that most car owners have felt the importance and effectiveness of the mandatory “auto-citizen”.
PROBLEMS, PROBLEMS …
Even at the stage of preparation of the bill, many serious insurance companies made proposals based on international experience and practice. The law, as it was passed, was the result of a compromise. Naturally, after a year and a half, the problems that we warned about began to "crawl out of all the cracks." It must be remembered that before the introduction of the mandatory “auto-citizen” insurance companies in Russia did not immediately encounter such a huge influx of customers. It is clear that the customer service system has not yet been fully debugged when an insured event occurs, and a single database has not been launched.
According to the same survey, those who are not satisfied with the work of insurance companies (which is about 25% of customers) are most annoyed by red tape, bureaucracy, delay in paying insurance compensation, and incomplete compensation. And 23% of those dissatisfied are sure that they were unreasonably refused payment. 39% of dissatisfied car owners complained about impolite treatment and poor service.
True, there is a very positive trend. When dealing with customer complaints, we often find that people propose specific ways to improve the service, advise making such changes to the law that would significantly speed up and simplify the procedure for resolving losses, and help fight fraud. Thus, not only insurers, but also many car owners became participants in this process.
It is clear that any accident is a psychological trauma and material costs for the victim. Therefore, the task of insurance companies is to achieve the fastest possible service for the payment of insurance compensation to the victim. Not everything is still smooth, and we and our colleagues in the insurance community carefully monitor all complaints and complaints of customers and work to resolve them. If we talk about Rosgosstrakh, then, given the huge customer base of the company, the total number of complaints is extremely low, and compared to other insurance companies it is scanty.
OH THESE TARIFFS!
Perhaps the most debate is about tariffs. Let's set aside emotions and recall how, for example, prices for spare parts for foreign cars from Europe are rising due to the growth of the euro. Prices for gasoline are also rising: by 27.3% for 9 months of 2004. For those who poured 40 liters of AI-92 gasoline into the tank once a week in September, an average of 2276.8 rubles were spent per month (the price of 1 liter of AI-92 in Moscow was 14.23 rubles).
The cost of an insurance policy in the country on average is 1970 rubles (in Rosgosstrakh - 1500 rubles), and the average payment is 18 900 rubles.
I want to once again draw the attention of readers of the magazine - the tariff rate is determined not by insurers, but by the law on compulsory motor liability insurance.
Insurance is, first of all, statistics. If we analyze the statistics of accidents and the level of payments made by insurance companies, it becomes obvious that the rates at which insurers operate today are actually minimal. Already today, according to the Federal Social Insurance Fund, the loss in compulsory motor third-party liability insurance, taking into account the earned premium, reaches 60–100% for various insurance companies. And the current tariff includes a loss ratio of 80%.
When analyzing data on insurance premiums and insurance payments, it should be borne in mind that payments are increasing exponentially. From January to May of this year, the number of insurance premiums increased by 60%, and payments increased by more than 230%. Therefore, it is too early to make final judgments about tariffs. Many contracts with car owners expire in January 2005. We will receive the most realistic statistics on servicing these contracts at best in March. And it will be possible to calculate all the data no earlier than autumn. Otherwise, there is a great danger of discrediting the idea of compulsory insurance as a guaranteed way of compensation for damage caused to a victim in an accident.
ABOUT HUGE PROFITS
Only people who do not understand anything in insurance undertake to assert that compulsory motor third-party liability insurance brings us huge profits. This is a completely incompetent opinion! According to the RSA, for the year of the Law on CTP, 25.2 million CTP policies were sold; 48.2 billion rubles raised 535 thousand insured events were declared, of which 434 thousand were settled, and 101 thousand insured events remained unresolved. Payments already amounted to 8.2 billion rubles. The average payout is 18.9 thousand rubles.
According to the law, 77% of the insurance premium is intended for insurance payments, the rest - expenses of insurers and deductions to reserves for making compensation payments. This moment - with the obligatory reservation of funds by insurance companies for three years for future payments - is ignored by those who talk about how they make money on OSAGO.
According to expert estimates, the final amount of losses for all concluded agreements may amount to more than 31 billion rubles. But there are still payments by insurance companies in RSA to the fund “Man, Car, Road, Ecology” (CHADE) under the auspices of the Russian Union of Auto Insurers. The fund was specially created to increase the material and technical support of the traffic police, and to contribute to road safety. And special equipment is already being sent to the regions, which will allow the traffic police to significantly increase the efficiency of their work. Over the 12 months of the law, companies have transferred approximately 440 million rubles to the CHADE fund. The share of Rosgosstrakh in the ChADE fund, formed within the framework of the Russian Union of Auto Insurers, reaches 40%.
Neglect of all these facts gives a distorted and understated value of loss. This is what we mean when we say that insurance is not arithmetic, but higher mathematics.
Around the world, CTP is unprofitable. In Latvia in the first half of 1999 (compulsory motor third party liability insurance was introduced there in 1998), the loss ratio amounted to 108.21%. And according to the results of the 3rd quarter of 1999 - 124%. But Latvia is a more law-abiding country than Russia, the fines are much higher there, and the speed limit is observed incomparably stricter.
In 1998, in Estonia (the year of the introduction of “auto-citizen”), the loss ratio was 58.76%, but already from January to April 1999 the loss ratio rose to 68.44%, and taking into account the significant costs of doing business and commissions for OSAGO agents, in Estonia unprofitable. After Estonians took into account the costs of doing business in tariffs, in the first year, tariffs were increased by 30%.
Not a single insurance company in the world has profit from compulsory motor liability insurance. Only temporary investment income from the allocation of reserves is possible, but the reserves are placed strictly under the control of the Ministry of Finance. For most companies, CTP was and remains a tool to expand the customer base. Therefore, in Russia, where the insurance culture is only developing, CTP can become a locomotive for other types of insurance, if only because it will introduce people to insurance.
"CAR CITIZEN" AS A LOCOMOTIVE
About 40% of all Russian car owners entrusted their insurance coverage to our company. The share of Rosgosstrakh in the market of large cities (excluding Moscow) exceeds 40%, and in rural areas it reaches 60%. This is a great honor, but also a tremendous responsibility to our customers.
Our leadership is the result of a very intense and focused work of the entire Rosgosstrakh system, all of its employees in the territory of our vast country. We carefully assessed the potential loss of a new type of insurance. An assessment of the necessary investments was carried out, a detailed business plan was developed. Over the year, the volume of investments in OSAGO reached several tens of millions of dollars. Huge organizational work was carried out to build the entire system, a network of centers for settlement of losses in the country was created.
The development of customer service and the efforts of the company's management to implement OSAGO allowed the creation of a modern infrastructure for the settlement of losses and customer service. The paradoxical fact is that when settling losses, if our client is to blame, we serve clients of other insurance companies. Therefore, our investments in OSAGO are investments in the future loyalty of our current and potential customers.
One of the results of OSAGO was the growing need for motorists in other types of services and new products. For 9 months of 2004, Rosgosstrakh expanded its presence in the voluntary car insurance market (DSAGO), increasing the collection of insurance premiums by almost 35% to 2.2 billion rubles. At the same time, about 1.3 billion rubles of indemnities were paid in hull and compulsory motor liability insurance.