The Russian insurance sector is becoming increasingly consolidated, Fitch Ratings has reported.
The ratings agency has indicated that the share of Russia's top 20 general insurance groups has increased by 11% over the past two years.
The market has been characterised by intense competition and the regional expansion of major insurers, which has squeezed medium and small-sized regional players out of the market.
Anastasia Voronkova, associate director in Fitch's insurance team, said: "Large insurance groups have been most successful in expanding their operations, growing faster than the market overall.”
Other contributing factors include the tightening of regulatory capital requirements as well as requirements relating to the structure of assets and underwriting discipline, thus forcing weak players and tax-avoidance vehicles to exit the market.
Fitch predicts that the number of core non-life insurance groups is likely to decrease to 12-15 from 20 in the next two to three years. Mergers, acquisitions and external capital injections will be the most efficient measures to retain leadership. Share of the leading groups will continue to grow in all segments except the life segment, where main local players will face competition from subsidiaries of foreign competitors.
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