OREANDA-NEWS. May 29, 2009. ROSNO has held a strategic dialogue dedicated to development prospects of the company’s Central Directorate for the period of 2009 to 2010. The company’s management has summed up the Directorate’s performance results achieved in 2008 and Q1 2009, and discussed strategic initiatives to be implemented in this region in the next three years, reported the press-centre of ROSNO.

The event was attended by Mr. Vasily Grishutkin, Deputy CEO of ROSNO and head of the Central Directorate, and ROSNO board members: Ms. Galina Talanova, Deputy CEO, and Ms. Olga Stepennova, Deputy CEO.

During the strategic dialogue, it was noted that, in 2008, the central region’s insurance market1 expanded by over 28%, from 24.7 to 31.8 bn roubles, thus exceeding the average Russian growth rate more than twofold. The highest dynamics of growth in insurance premium collected was demonstrated by the Kaluga Region (+48%), the Tula Region (+41%) and theVoronezh Region (+44%).

"The development prospects of the central region’s insurance market can be described as moderately optimistic. In 2008 to 2011, the average annual growth in the insurance market may equal 5%. At the same time, in 2009, the aggregate premium collected by insurance companies may decrease by about 10% from the year 2008 level", states Mr. Vasily Grishutkin, Deputy CEO of OJSC IC ROSNO and head of the Central Directorate. "In the years to come, the insurance market growth will be largely driven by OMTPL insurance, due to the expected significant increase in territorial tariffs. In 2008 to 2011, average annual growth in this segment may equal 11%".

Popular in the Russian border regions (there are five such regions in the Central Federal Okrug) will be the new insurance product "Zelenaya Karta" (Green Card). This product provides international OMTPL coverage for those who travel by car outside the Russian Federation. The right to sell policies under the "Zelenaya Karta" (Green Card) program belongs to only 12 insurers. ROSNO is in this group. "In Q1 2009, we already observed an increasing interest towards the „Zelenaya Karta“ (Green Card). The share of the Central Directorate in the aggregate premium collected by ROSNO from this type of insurance equalled 21%. This product is most popular in Smolensk and Bryansk Regions (1.4 million roubles and 1.1 million roubles respectively)", notes Mr. Vasily Grishutkin.

The most actively developing markets, The Tula Region, the Vladimir Region, the Voronezh Region, the Kaluga Region and the Kostroma Region, will be the most attractive regions for further growth of insurance business in the Central Federal Okrug (in such insurance segments as OMTPL, voluntary medical insurance, and personal property insurance).

In 2008, ROSNO’s Central Directorate collected 1,009.3 million roubles of insurance premium. A considerable growth was shown by the Belgorod branch (+ 77%), with 59 million roubles of insurance premium collected. The region’s rapid increase in insurance premium collected was driven by motor insurance and agricultural risks insurance. In addition, positive growth was demonstrated by the Tula branch and Ryazan branch (by 25% and 27% respectively). The growth of premium collected in the Kursk Region and Ryazan Region can be attributed to more frequent agricultural risks insurance and voluntary medical insurance (VMI).

The largest volumes of insurance premium collected by ROSNO were recorded in the Voronezh Region (75 million roubles), the Ryazan Region (100.9 million roubles) and the Smolensk Region (78.5 million roubles). The company has its strongest positions in terms of market share in the Kostroma Region (3.7%), the Ryazan Region (4.6%) and the Smolensk Region (4.9%). The major portion of the Directorate’s portfolio pertains to medical insurance (49%) and motor insurance (35%).

In Q1 2009, ROSNO’s Central Directorate collected 354.3 million roubles of insurance premium. The major growth drivers were VMI (+16%) and MOD (+63%) insurance segments.
Positive dynamics was shown by the branches in Belgorod (21 million roubles, +214%), Voronezh (26 million roubles, +3%), and Kaluga (12.9 million roubles, +2%). In the Voronezh Region, ROSNO-Chernozem’e branch demonstrated a Q1 2009 growth in VMI (+7%) and MOD (+24%) insurance segments. In the Belgorod Region, ROSNO’s premium grew in such segments as VMI (+473%), MOD (+145%), corporate property insurance (+1114%), and liability insurance (+957%).

The current macroeconomic situation presents new challenges for the insurance market. Against the backdrop of the contracting insurance market, its changing demand structure, lower corporate profits and higher foreign exchange risks, ROSNO continues pursuing its strategy "One + 3", also at the regional level. Its major objective is to ensure stable improvement in the company’s competitive power and value proposition, accompanied with profitable growth.

"In accordance with our strategy, we are permanently tracking the clients’ insurance needs and are focusing on the products allowing for the current realities and capable of satisfying diverse client groups. In addition, we seek to make maximum use of the regional specifics. In the southern regions of the Central Federal Okrug, ROSNO’s Central Directorate offers attractive terms of agricultural risks insurance, and in the northern regions we are the leaders in the VMI segment. To strengthen our positions in these insurance products, we plan to set up new selling divisions specialized in VMI and weather risks insurance, to be based in the Directorate’s Central branch", stated Mr. Vasily Grishutkin.

1 By regions of presence of ROSNOs Central Directorate.