1. Russian Insurance Market Growth Perspectives
and Main Directions of Investment Development
June 2010

2. Number of insurance companies on the market: dynamics in 2005-2009
According to the results of 2009, 702 insurance companies are registered on the market. The number of companies reduced
on 84 or 10,7%, compared to 2008.
1400
1300
1281
1200
Number of companies, units
1206
1154
1100
1075
1000
933 918 911
900
921 913 842 830
869 814
857 786
800
743 722
768
700
702
600
Year 2005
Year 2006
Year 2007
Year 2008
Year 2009
1Q 2005
1H 2005
1Q 2006
1Q 2007
1H 2007
1Q 2008
1H 2008
1Q 2009
1H 2009
9 months 2005
9 months 2006
9 months 2007
9 months 2008
9 months 2009
Source: Federal Service for Insurance Supervision
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3. Insurance market concentration
Concentration of premiums increased significantly in 2009. Today more than half of premiums net of compulsory
health insurance (OMS) are collected by Top 10 companies. Top 100 largest companies actually form the insurance
market. 21 companies have more than 1% market share on insurance market.
2008 2009
Insurance market Insurance market
total total
Voluntary lines +
(including OMS) MTPL (including OMS) Voluntary lines + MTPL
Share of insurance companies in insurance premium collection
Top 10 companies 40,5% 48,7% 44,0% 52,8%
Top 20 companies 55,0% 64,2% 59,0% 67,1%
Top 50 companies 74,2% 79,0% 77,0% 81,1%
Top 100 companies 85,3% 87,8% 87,9% 89,6%
100 companies - outsiders 0,006% 0,001% 0,008% 0,001%
Source: Federal Service for Insurance Supervision
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4. Russian Insurance market: dynamics in the last 10 years and
development forecast up to 2015
45
38
40
33
35
29
30
26
22
25
22 19
20
19 16 20
13 17
15 13 15
12 15
9 9 10 13
10 8 11
5 6 9
3 4 7
5 3 3
1 2
0,3 0,3 0,3 1
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010 (forecast)
2011 (forecast)
2012 (forecast)
2013 (forecast)
2014 (forecast)
2015 (forecast)
Premiums, total, net of OMS, RUR bln
Voluntary lines, total, RUR bln
Insurance at the expense of citizens, premiums, RUR bln
Unless another economic cataclysm breaks out in the world or in Russia, the volume of Russian
insurance market will double in the next 5 years

5. Insurance market structure, 2009
According to the results of 2009 the largest segment was OMS with the share of 47% compared to 41,7% a year before. In
personal lines voluntary health insurance is dominating, in property lines the leader is casco of motor transport. Voluntary
liability market is more or less equally divided among major lines of business.
47% (41,7%) 2% (2%) life insurance
*The share of LOB in 2008 is 10% (11,4%)
personal lines (without life insurance)
given In brakets
property insurance + financial risks
liability insurance
compulsory state personal insurance +
compulsory personal insurance of passengers
9% (8,5%) 28% (33,4%)
MTPL
1% (0,8%) 3% (2,4%)
Source: Federal Service for Insurance Supervision
compulsory health insurance
Structure of premiums in voluntary liability
insurance
Personal insurance structure Property insurance structure
Land transport
vehicles, except
railw ays Voluntary TPL
Accident
27% Other vehicles 15%
35% TPL of other vehicles
52% 44% 15%
Hazardous Facilities
Voluntary Cargo +
73% 9% insurance
health agriculture
10% 17% Liabilities for contracts signed
insurance
3% Fire insurance Other
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6. Top 10 companies on the Russian insurance market: dynamics of
premiums and market share, net of Compulsory health insurance,
2009 and 2008
RGS has 13,2% market share, net of OMS, with RUR 67,5 bln in premiums. Premiums growth compared to 2008 is about 13%.
Ingosstrakh is the nearest competitor, with premiums growth of about 6% compared to 2008, and RUR 44,7 bln in premiums.
SOGAZ demonstrated very similar result with RUR 38,9 bln in premiums (premiums volume is almost the same as in 2008).
70 14%
13,2%
60 12%
Premiums net of OMS, RUR bln
Market share net of OMS, %
50 10,8% 10%
8,7%
7,6%
40 8%
7,6% 5,9%
30 7,0% 6%
5,5% 4,0% 3,8% 3,1%
20 2,9% 4%
3,9% 4,0% 2,0%
3,8% 1,9%
10 2,4% 2%
1,7%
59,8 67,5 42,1 44,7 38,4 38,9 30,1 30,4 21,9 19,8 22,0 19,5 17,0 19,3 16,2 12,3 12,6 10,3 9,4 9,5
0 0%
GARANTIA
STRAKHOVANIE
SOGAZ
ZHASO
VSK
URALSIB
INGOSSTRAKH
ROSNO
RGS
RENAISSANCE
RESO-
Source: Federal Service for ALFA-
Insurance Supervision
Premiums 2008 (left axis) Premiums 2009 (left axis) Shares 2008 (right axis) Shares 2009 (right axis)

7. Attitude of people towards insurance companies
Insurance company selection factors Attitude of people to specific features of
companies
70%
59%
Share of cusomers who believe that their company mees these
60%
requirements
Share of insurance services consumers are
satisfied with in their insurance company
Provides attractive financial offerings to
Affordable company with conveniently
50%
Provides high quality service to its
40%
35%
30% 28%
Fulfills its obligations
25%
20% 19%
20% 17%
located offices
its customers
customers
Positive
Reliable
Modern
10%
0%
91,4% 93,3% 90,8% 90,7% 89,3% 80,2% 91,9% 91,4%
Guarantee of Affordable State status Quality of Convenience Brand Wide range
claim prices (participation service of offices popularity of services
payments of the state in location provided
the capital)
In these days, “quality of service” factor occupies the third place among the factors of insurance company selection, after
the guarantee of claim payments (reliability) and the cost of policy. However the attention to service quality among
consumers is increasing, which requires additional investments.
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8. Types of insurance most attractive for population
Share of population indending to use different types of insurance (in the total number of those intending to buy
insurance)
16% 14%
14%
12% 11% 11%
10% 9%
8%
8% 7%
6% 6%
6% 5%
5%
4%
4%
2% 1% 1%
0%
Summer cottage insurance
Household insurance
Casco of motor transport
Travel insurance
Insurance of apartment or house under
Apartment insurance
Insurance of a house in a city
Voluntary health insurance
Accident insurance
Risk life insurance
Endowment life insurance of children
Pension insurance
Endowment life insurance
city program
Source: Rosgosstrakh research, May 2010
The types of insurance with highest potential in the upcoming years in Russia are real estate insurance, casco of motor
transport, personal lines, and life insurance. The development of the market in these directions requires considerable
investment in infrastructure, IT, distribution systems
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9. Operating expenses and reference to insurance premium (net of OMS)
9,0 40%
36%
38%
33% 8,0
8,0 35%
7,0
30%
28%
6,0 6,1
6,1
24% 25%
5,0
20%
4,0 4,3
16%
15% 15%
3,0 11%
9% 11% 3,2
10%
2,0 9%
1,9
6%
1,0 1,4 5%
0,5 0,3 0,4 0,5
0,9
0,0 0%
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Operating expenses, USD bln Reference of operating expenses to premiums net of OMS
Source: State Statistics Committee
In recent years competition is growing more severe in Russia, which increases the need for investment on the part
of insurance companies
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10. Lines of business important for the development of investment climate
Diagram 1
Insurance as such contributes to the 45 10%
8%
Share on the market net of
40
development of investment, innovation
Russian market, RUR bln
Premiums volume on the
35 7% 7% 8%
6%
and economy at large 30
6%
25
OMS
Lines of business that may additionally 20
4%
15
contribute to innovation and investment 10 2%
but are insufficiently developed in Russia 5 29 31 36 40
0 0%
at present are voluntary liability 2006 2007 2008 2009
insurance (except voluntary MTPL), Premiums volume Share of innovative types of insurance
financial risks, EAR/CAR insurance (see
Diagram 1). The share of these lines in
Russia in 2009 increased compared with
average value of 2007-2008 Share of LOB on insurance
GWP, EUR mln
Table 1 market as a whole
EU total 0,7% 7 285
Some types of insurance developed in Germany 1,9% 3 204
European countries are not practiced in France 0,4% 730
Russia, for example legal expenses UK 0,3% 713
Austria 2,4% 392
insurance (see Table 1), or some types
Poland 2,2% 380
of professional liability insurance. D&O
liability insurance is a perfect example of
such.
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11. Lines of business important for the development of investment climate
Liability, except voluntary TPL and
vehicle owners liability, 2008 GWP, EUR mln
In absolute terms Russian market is France 6 792
significantly lagging behind developed Germany 6 826
European economies. In particular, GWP of UK 7 383
insurance types so important for investment Russia (estimate, 2008) 455
climate such as EAR/CAR insurance, loans
insurance, transport insurance are far less
EAR/CAR insurance GWP, EUR mln
than, for example, in Germany or France. France (2008) 2 500
Russia (estimate, 2008) 317
These lines of business, on the one hand,
contribute to investment climate
development, and on the other hand, depend Transport insurance, except motor
(including liability) - MAT (marine, GWP, EUR mln
on it in the first place. That is why the growth aviation & transport), 2008
Germany 1 730
of these lines of business will go forward as
Russia (2009) 784
Russian economy develops, investment and
innovative activity increases.
Loans insurance
GWP, EUR mln
Germany 1 387
Russia (2009) 211
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12. Main conclusions
Russian insurance market is growing rapidly, we have all reasons to believe that this
growth will continue. The concentration of the market is increasing, this requires
considerable investment from the leaders into operations development.
Russian insurance market leaders in general comply with the expectations of
population. The companies achieved this at the expense of heavy modernization of
their business in recent years. Today the support and development costs of Russian
companies are high.
The types of insurance with the highest potential in Russia are real estate insurance,
casco of motor transport, voluntary health insurance, accident and life insurance.
The development of these lines will require investments and technical re-equipment
of insurance companies.
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