Translated material
Volunteers needed
The insurance market is waiting for consciousness from Russians and the state
Without loud reports and regular reports to the president, Russians, in parallel with the priority national project “Health,” are implementing their own program to increase funding for the medical industry. Companies involved in voluntary health insurance (VHI) in Russia will publish preliminary results of their work for the past year in early March. But it is already clear that the growth of this segment of the insurance market has exceeded inflation, and quite significantly. Some insurers even call 2006 a turning point to some extent. “We have grown by about 50%,” Firm Gotovac, head of the health insurance department at Renaissance Insurance, told Vremya Novostey. According to her, employers have finally appreciated how important insurance is for job seekers. Many even began to insure employees not only against illnesses, but also against accidents. “I think the market as a whole has grown by 30-35% over the year,” Ms. Gotovac assesses the situation from the height of her own success. But analysts give more modest estimates. There are no exact figures for the country as a whole yet, but the increase is estimated at at least 20%. If the total volume of the voluntary health insurance market in 2005 was 35.3 billion rubles, then in 2006 it was no less than 42 billion rubles.True, there are still far fewer citizens in Russia who consciously insure themselves against illness than there are holders of voluntary CASCO car insurance. Although everyone gets sick, and not everyone has a car. But people have clearly become more interested in their own health. Almost all large employers, including those in the public sector of the economy, are thinking about the need to insure their employees. And not only in the capitals and several mining regions, as was the case quite recently, but also in all major cities. Actually, it is thanks to corporate clients that the market is experiencing significant growth, because 90-95% of all voluntarily insured people are people who received a policy at work. Today, both the state and the insurers themselves are advocating for an increase in the number of corporate clients. Individuals who insure themselves at their own expense, although they pay significantly more for the policy than companies, are not very profitable for insurers.
As the MAX insurance company explained to a Vremya Novostey correspondent, the cost of a voluntary health insurance policy for individuals today varies from 480 rubles. up to $10 thousand and can cover various levels of medical services. Including high-tech types of assistance, rehabilitation and recovery treatment after serious illnesses, both in Russia and abroad. Of course, for 500 rubles. you can't count on much. Policies costing from $1,000 to $2,000 are more common. But even such quite significant amounts do not cover losses from the so-called anti-selection of risks or “worsening selection.” Insurers believe that the majority of individuals applying for a VHI policy obviously need medical care and thus try to reduce treatment costs. In addition, many people buy policies for a short period - for example, for a quarter, in order to undergo a full medical examination with visits to all imaginable specialists and to treat long-standing sores. Such clients typically use more than 100% of their insurance.
But despite this, there was also an upswing in the private segment last year. “The dynamics of growth in the number of private VHI clients exceeded those in the corporate sector. The growth is approximately 20-25%,” says Tatyana Sadkovskaya, director of the VHI directorate at MAX. Experts believe that voluntary health insurance in our country has very broad prospects, especially given the skeptical attitude of Russians towards the so-called free healthcare and compulsory health insurance. However, this is hardly a matter of the near future. “In order for VHI to become a truly widespread type of insurance, significant changes must occur both in the level of people’s well-being and in their psychology,” Alexey Yanin, leading analyst at the Expert Ra rating agency, told Vremya Novostey.
As follows from the report of the Expert Ra agency, most insurers are involved in voluntary health insurance to one degree or another. According to the Federal Insurance Supervision Service, about 75% of registered insurance companies are licensed to provide voluntary health insurance services. However, the share of voluntary health insurance in their insurance portfolios is insignificant; most of them insure only the personnel of “related” companies. “In essence, in such cases we are talking about tax-saving schemes that have little in common with real insurance,” says Alexey Yanin.
VHI began to be seriously considered as a potentially profitable product, and not as one of their tax optimization schemes, only in the last three to four years. A wide range of products that take into account the characteristics of different patient groups are offered today mainly only by market leaders - federal-level insurers working with industrial giants and large mining companies. They account for more than 50% of the total market. However, Rosstrakhnadzor notes that as the number of “volunteers” grows - both corporate and individual - the profitability of VHI for insurance companies also increases. Thus, in 2004, the difference between collected premiums and insurance payments was about 8.4 billion rubles; in 2005, insurers managed to earn 11.8 billion. By the end of 2006, this figure will increase by 20-25%, they believe experts.
Making another noticeable breakthrough in voluntary health insurance in the near future will most likely be helped by the unfortunate fact that the so-called free medicine in practice is costing Russians more and more. Envelopes for doctors and nurses, separate fees for X-rays, ultrasounds and other supposedly high-tech diagnostic services often exceed the cost of even individual voluntary insurance. As soon as citizens realize this, they will be more willing to insure themselves, experts say. In addition, thanks to the priority national project “Health,” the technical equipment of regional and district medical institutions should be increased, which will provide the material basis for promoting VHI in the regions. Of course, the leaders of the Ministry of Health and Social Development, when developing the national project, were unlikely to care specifically about the insurance business, but the companies immediately felt this side effect. Also, the influx of citizens into VHI will be ensured by citizens who are accustomed to using the services of paid medicine: paying for a policy is the same as buying these services in bulk.
Premium Leaders
| 1 | SOGAZ | 8 993 958 | 8 080 384 |
| 2 | ROSNO | ||
| (in 2005 - 3rd place) | 5 863 267 | 2 626 534 | |
| 3 | ZHASO | ||
| (in 2005 - 2nd place) | 5 306 305 | 3 705 619 | |
| 4 | INGOSSTRAKH | 3 344 652 | 2 131 892 |
| 5 | RGS system | ||
| (in 2005 - 6th place) | 3,066,821 | 1 435 772 | |
| 6 | RESO-GUARANTEE | ||
| (in 2005 - 5th place) | 2 875 597 | 1,171,739 | |
| 7 | RUSSIAN STANDARD INSURANCE | ||
| (in 2005 - 8th place) | 2 021 462 | 15 895 | |
| 8 | NIKA | 1 881 174 | 1 359 809 |
| 9 | URALSIB | 1 721 719 | 797 846 |
| 10 | MILITARY INSURANCE COMPANY | 1 584 133 | 541 400 |
| 11 | MAX | ||
| (in 2005 - 7th place) | 1 458 338 | 876 503 | |
| 12 | RENAISSANCE INSURANCE GROUP | ||
| (in 2005 - 13th place) | 1 193 060 | 615 506 | |
| 13 | CAPITAL INSURANCE | ||
| (in 2005 - 14th place) | 1 147 480 | 707 902 | |
| 14 | SURGUTNEFTEGAZ | 1,037,032 | 921 271 |
| 15 | PROGRESS-GARANT | 976 123 | 608 453 |
| 16 | ENERGOGARANT | 969 744 | 613 564 |
| 17 | ALPHA INSURANCE | ||
| (in 2005 - 18th place) | 916 189 | 529 715 | |
| 18 | SHEKSNA-M | ||
| (in 2005 - 17th place) | 867 245 | 685 636 | |
| 19 | YUGORIA | 838 619 | 369 531 |
| 20 | TRANSNEFT | ||
| (in 2005 - 16th place) | 828 200 | 255 579 | |
| Total | 46 891 118 | 28 050 550 |
Data provided by the Federal Insurance Supervision Service of the Russian Federation