OREANDA-NEWS. May 28, 2010. Representatives of Ingosstrakh OJSIC took part in ViII International Professional Forum ‘Risk Management in Russia and CIS: New Challenges and Possibilities’, which took place on May 19-20, 2010 in Moscow. The company also acted as an official partner of the Forum.

This annual event is a prestigious site for interaction of processionals in the area of risk management from over twenty countries of the worlds, Russia and CIS.  Discussion of issues and prospects of the risk management development in Russia and CIS counties in conditions of the world financial and economic crisis and thereafter; development of practical recommendations regarding new approaches to risk management in the industry and financial sphere in the post-crisis environment; development of communication between risk managers of companies in various economic sectors and representatives of insurance and investment companies, credit and financial and expert organizations, representatives of governmental authorities and national and international organizations, and study of practical examples of risk management in new conditions  have become the objectives of the Forum this year.

Nikolai Galushin, Deputy Director of Ingosstrakh, presented a report ‘Risk Management in Conditions of the Financial Crisis: the Insurer’s Point of View’. Especially, he marked that insurance was one of the most efficient tool of risk management; however, the Russian insurance market performance in 2009 would be rather poor if considered under this angle. The market of commercial insurance in Russia degraded in conditions of the financial crisis, and this happened for the first time after many years of dynamic and rather rapid growth. The premium income went down almost in all areas due to two major drivers: refusal of many companies to obtain services of insurers in their aspiration for cost cutting, and toughening of competition, generally, price competition among the insurance companies themselves.

We observe management opportunities de-scoping on the part of insurants: they save on safety and maintenance of buildings, constructions and equipment, and choose cheaper insurers, which is fraught with difficulties in regulating losses and receiving the insurance compensation. The insurance companies, in their turn, have qualitatively changed approaches to risk evaluation by toughening internal control procedures, analysis of risks and loss ratio of the portfolio, and approaching the issue of re-insurance more responsibly.

Overall, the consequences of the financial crisis for the insurance market may be divided into negative and positive ones. The first ones include, first of all, intensification of damping and weak control over the acquisition costs, return of schemes and development of pseudo-insurance – a formal approach to the law requirements regarding the insurance protection availability. Among the positive factors of the crisis impact we can name the market vacation from the insurance companies that are prospectively dangerous for the consumer, growth of conscientiousness in interaction within the insurance community, more weighed policy of the reserve allocation in the financial system, staff improvement in the insurance companies, regulation of the loss regulation procedure and increased attention of government to the insurance market regulation.