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Hurricanes in the north western Russia (English version)


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Presentation at Rosbalt on 29th September 2010

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Hurricanes in the north western Russia (English version)

  1. 1. RESO-Garantia Branch in St. Petersburg Marketing Director Serge Brovko There is no safer protection from hurricanes, fires and disasters than insurance Rosbalt, 29 September 2010
  2. 2. Название слайда According to the BBC, the profits of the world's largest insurer declined due to disasters Largest insurance company Lloyd's reported a decrease in profit by 50% in the first half of 2010 in connection with compensation for an accident in the Gulf of Mexico and the earthquake in Chile. Insurer's pretax profit was £ 628 million, while a year earlier, a similar figure emerged at the level of £ 1,32 billion "Unfortunately, this year brought us more accidents than have brought the past 20 years" - said the representative of Lloyd's top management, Richard Ward. As stated in the documents of the company, the losses incurred by the insurer due to the earthquake in Chile amounted to about $ 1.4 billion, an accident on the platform of the British oil company BP has costed to Lloyd's $ 600 million In addition to Chile and the Gulf of Mexico, the company's financial results have influenced U.S. tornadoes, European floods and storms, and earthquakes in Haiti and China.
  3. 3. As a comparison – hurricanes in Australia are not asleep as well <ul><li>99% of loss in the buildings sector in Australia over the past 100 years were due to the adverse effects of weather factors - tropical cyclones (especially the hurricane storms) and fires in the woods. Source: «NATURAL DISASTER LOSSES AND CLIMATE CHANGE: AN AUSTRALIAN PERSPECTIVE» (University of Colorado) </li></ul>
  4. 4. President Dmitry Medvedev does not rule out that Russia will again introduce mandatory home insurance against fire <ul><li>&quot;This summer has taught us,&quot; – the head of the state said at a meeting on the financial sustainability of agro-industrial sector on Tuesday. </li></ul><ul><li>&quot;Now I'm waiting for proposals to change current civil legislation in terms of a possible return to the construction of compulsory insurance against fire,&quot; - said Medvedev. </li></ul><ul><li>He recalled that from the rule previously had to be abandoned because it was &quot;believed to be not fully corresponds to the nature of insurance as a voluntary commitment.&quot; &quot;But certain funds necessary to create&quot; - the president expressed confidence in it. </li></ul><ul><li>He added that &quot;homeowners insurance in rural areas should be massive,&quot; and he has given appropriate instructions about it. </li></ul><ul><li>(Interfax, September 21, 2010). </li></ul>
  5. 5. Dmitry Medvedev's proposal affects rural housing <ul><li>However, if it is imposed in respect of urban housing, then it will mean the following: </li></ul><ul><li>An assumption is made that residential area in St. Petersburg amounts to (the data of 2008-2009. - 20,3-23.1 sqm / pax * 4, 5 million of population) = 90 million sqm </li></ul><ul><li>We assume that the cost of 1 sq. m. = 60-80 thousand rubles. Then the total cost of housing in St. Petersburg will be 5.400 - 7.200 bln Rbls. Then, if the insurance tariff, for example is somewhat around 0,5%, and if we include non-privatized apartments (which can be insured by the city authorities from the city budget), the market for compulsory insurance of urban housing from a fire may be around 27-36 billion rubles. – It means doubling of the insurance premium in the city! </li></ul><ul><li>Currently insured housing (as per our rough estimates) is no more than 10-15% of the total housing in the city. </li></ul><ul><li>In the case of compulsory insurance (i.e. 100% of housing) rates will fall below 0.5%, say up to 0,2-0,3%. For a flat costing 3 million rubles it will mean a premium of 6-9 thousand rubles a year - for coverage of all fire risks for housing (construction elements). </li></ul>
  6. 6. 2010 facts of RESO-Garantia in the Northwest of Russia <ul><li>This year in the North West started for the company from increased number of requests for all kinds of claims (by about 40 percent over the same period last year). </li></ul><ul><li>Then the spring flooding of houses took place in the Leningrad region. It happened due to melting of winter snow. </li></ul><ul><li>Unusual weather in the summer of 2010 brought to central Russia fires and fumes and to the North-West Russia - hurricane-force winds (official name “storm reaching hurricane power&quot;) as well as blackout due to a failure of a power station in Vsevolozhsk area of Leningrad region. </li></ul><ul><li>Preliminary results followed in the form of the growth of applications, payments for claims by insurer and financial losses. However the other result if the growing share of CUSTOMERS WHO UNDERSTOOD IMPORTANCE OF INSURANCE COVER </li></ul>
  7. 7. Beneficiaries of insurance payments are the inhabitants of the region - Syasstroysky Pulp and Paper Mill (307 mln.Rbls ONE SETLLED CLAIM for fire cause) Trade House &quot;Petrovsky&quot; (settled claim more than 20 million rubles), other businesses in the region 2 . At night, January 4, 2010 in St. Petersburg in the industrial zone of &quot;Parnassus&quot; fire appeared in premises of Trade House &quot;Petrovsky”. In order to fully extinguish the fire, 12 fire brigades worked for several hours. Fire damaged nearly two hundred square meters of warehouses. Technical equipment was damaged almost completely/ Damages included ventilation equipment, alarm systems, as well as commercial equipment/ Also part of the inventory of &quot;Petrovsky&quot; was destroyed 1. Syasstroysky PPM 3. Consequences of summer storms in the Leningrad region.
  8. 8. How much has it costed? <ul><li>In 2010 in Russia total spendings have reached: </li></ul><ul><li>- Compensation for fire victims - 10.067 billion rubles, - Expenditures to fight the fires - 2,2 billion rubles. </li></ul><ul><li>(Data of portal “Wood.Ru”, 13.09.10) </li></ul><ul><li>What is the source of these expenses? Those were taken from taxes paid by us! </li></ul>
  9. 9. Legal restrictions <ul><li>The Civil Code provides: </li></ul>Article 210. The burden of maintaining the property. The owner has the burden of maintaining his property , unless otherwise provided by law or contract. Article 211. The risk of accidental loss of property. The risk of accidental loss or accidental damage to property lays on its owner , unless otherwise provided by law or contract
  10. 10. <ul><li>Future belongs to insurance! </li></ul><ul><li>Thank you for your attention. </li></ul>