The high profile of regulatory bodies and legislative changes are leading to higher capitalization of insurance companies, a drop in non-risk insurance and increased solvency and transparency in the Russian insurance sector. Simultaneously, tougher competition is lowering profits in the insurance business and weaker players are forced to quit the market. Take for example the bankruptcies of several insurance companies specializing in obligatory third-party auto insurance policies. The insurance sector is witnessing a strong trend towards consolidation and it is highly probable that in 2007 the market will comprise under a thousand companies. Although the Russian insurance market is well behind that of Central and Eastern Europe in terms of its development and penetration of insurance products, it has considerable potential for growth, especially in the area of life insurance.
To compete successfully, insurance companies in Russia need to widen their product range and develop their infrastructure and distribution channels. Effective management systems, appropriate incentive schemes for employees, risk control and accurate pricing policies will enable companies to successfully run their business and meet the expectations of shareholders and investors.
PricewaterhouseCoopers formed its insurance practice in Russia when the sector first emerged on the Russian market. Our considerable experience in Russia combined with the expertise of PwC’s specialists around the world means that we have a deep understanding of the issues facing insurance companies. We provide professional services in accounting, audit and taxation and consulting on actuarial issues and performance improvement. We closely follow developments and events on the market, actively participate in the Russian Insurers’ Association and the Pensions and Insurance Committee of the European Business Association.
In April 2006, in a poll by Reactions magazine, PricewaterhouseCoopers was recognised as the best audit and best consulting firm in Russia’s insurance sector.
