Former head of Ingosstrakh Alexander Grigoriev on the insurance crisis

Next week the management of Ingosstrakh will change - the company will be headed by Mikhail Volkov. The outgoing CEO of Ingosstrakh, ALEXANDER GRIGORIEV, told Kommersant about the consequences of personnel changes, details of the conflict between the company's shareholders, its Olympic projects, as well as the causes and consequences of the Russian insurance crisis.

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The state and society, just as they did not understand the essence of insurance nine years ago, still do not understand it now and do not see its strategic opportunities

Photo: Kommersant / Dmitry Dukhanin / buy photo

Insurers are very slowly moving from the stage when many were guided by the principles of “cheat, collect premiums and not pay”, to the main function - to pay

Photo: Kommersant / Dmitry Dukhanin / buy photo

Where did you see insurance?! Real savings and pension life insurance in Russia is $400–500 million, everything else is quasi-banking schemes

Photo: Kommersant / Dmitry Dukhanin / buy photo

— How is the change of general director of Ingosstrakh going?

— On April 2, a meeting of the board of directors was held, at which Mikhail Yuryevich Volkov was elected as the new general director. Our case transfer process will end on April 7th. We spent six months planning this work. Mikhail Yuryevich was appointed to the position of First Deputy General Director on October 21, 2013. And before that, he supervised us for six years from the majority shareholder. So he knows the company well.

— Do you leave Ingosstrakh with a light heart?

— They don’t leave with a light heart after more than nine years of working in the company. In addition, the insurance market is in a deep crisis. Moreover, the crisis is mental, ideological, and fiscal. The state and society did not understand the essence of insurance nine years ago, and they still do not understand it now and do not see its strategic opportunities. Public organizations, the government, the Ministry of Finance, and the presidential administration perceive insurance almost as a social security service or a social institution. This is where all the problems come from.

In addition, insurers themselves are very slowly moving from the stage of the 1990s and early 2000s, when many of them were guided by the principles of “cheat, rack up premiums and do not pay,” to their main function - to pay for insurance claims. This leads to the current crisis in motor insurance, which is largely man-made - by insurers, consumers, and society. And of course, the state, represented by the courts and the Ministry of Finance, did everything to “turn on the green light” for swindlers and swindlers.

I was told one version of the “conspiracy theory”. It looks something like this: the existing insurers are already fed up with everyone. They have already received their profits. The worse it gets for them, the better. The situation in which they suffer more and more losses is not terrible. Whoever survives will survive. But the majority will not survive, and the “clearing” will be cleared. Then the “new”, “good”, “honest” ones will come.

- Who, for example?

— For example, VTB Insurance, Sberbank Insurance, SOGAZ, that is, those who do not have a large retail portfolio now. That is why, for unknown reasons, decisions on seemingly simple and obvious issues are not resolved and deadlines are delayed. This is what conspiracy theorists think.

- And you are among them?

“Unfortunately, this version explains some questions to which I have no other answers.”

— What is the state of Ingosstrakh now?

— Ingosstrakh is much more stable compared to the company I took on. In general, three indicators influence the value: stable margin, stable capital, stable reserves. The equity capital of the Russian companies of the INGO group is stable even in 2013 - and amounts to 24.1 billion rubles. Insurance reserves increased in 2013 by 8.8 billion rubles, for a total of 72.3 billion rubles. Naturally, our margin for the year is negative due to motor insurance.

From a sustainability point of view, it is important to understand that an insurance company is important not for its profits, but for its reserves. And the correct relationship between reserves and the amount of insurance liability. Ingosstrakh, one of the top ten insurers in terms of collections, has the maximum ratio of reserves to portfolio volume. These reserves are more than enough. Therefore, Ingosstrakh will live and develop in peace. In terms of a reasonable market valuation, the company is currently worth not much less than its high valuation.

- How much?

— In my understanding, the company’s value is $2.5-3 billion.

— How much motor insurance does Ingosstrakh have in its portfolio?

— In 2012, premiums for auto insurance and compulsory motor liability insurance accounted for 65.5% of Ingosstrakh’s direct fees, in 2013 — 64.5%. Last year, Ingosstrakh began to reduce the share of motor insurance in its portfolio. As of March 31 of this year, it was 40%. The segment is in deep crisis.

In 2011, it was decided to make Ingosstrakh the country's first motor insurance company. In 2012, the company increased the volume of compulsory motor liability insurance and comprehensive insurance, realizing that the capabilities of information systems and underwriting allow it to work with clients efficiently, at optimal rates, and also to pay and compensate for losses fairly. Ingosstrakh has paid and continues to pay more under compulsory motor liability insurance within the framework of current legislation than any other companies. This is confirmed by the size of the average payment under compulsory motor liability insurance, which for ten years has been the maximum among all insurance companies operating in the compulsory motor liability insurance segment.

But in the fourth quarter of 2012, the state completely changed its attitude towards the development of compulsory motor liability insurance. In December, at a government meeting, it was announced that compulsory motor liability insurance tariffs would not increase. The same point of view was expressed in the presidential administration. And RSA (Russian Union of Auto Insurers - Kommersant ) had previously agreed with the government on all the amendments for the increase. Nobody wanted to listen to our arguments in December 2012 and January 2013. Although we honestly warned: this will cause a MTPL crisis. We were even accused of blackmailing the government. Already on February 2, 2013, Ingosstrakh took the path of reducing OSAGO sales volumes.

And the motor insurance crisis in the country is already two years old. The market is facing hard times, given the accumulated problems with negative margins and liquidity among insurers. Moreover, the Crimean factor has not yet been taken into account. According to my forecasts, the increase in fees in 2014 in the insurance market will be 2-3% maximum. But with inflation at 6%, this means negative growth.

— Due to the decrease in the share of compulsory motor liability insurance, only Ingosstrakh among the top 5 insurers experienced a drop in fees of 1 billion rubles. at the end of 2013 (from 67.8 billion rubles to 66.6 billion rubles, according to the Central Bank)?

- Yes. If you look, the portfolio of corporate clients has not decreased; retail volumes have decreased. And retail is primarily MTPL and comprehensive insurance. Ingosstrakh decided that the only correct action by professional insurers would be to reduce the share of MTPL in the portfolio. Even according to the data from the first and second quarters of 2013, none of the insurers understood what needed to be done. According to data as of July 1, 2013, only Ingosstrakh and Rosgosstrakh had a reduction in the share of compulsory motor liability insurance. And at the end of 2013, the situation changed dramatically - large insurers left OSAGO.

Companies now have two key problems. The first is that many of them work “from wheels”. And if they stop selling policies, they have nothing to pay for the losses. The clearest example is the Rossiya company (the Central Bank revoked the license of the oldest insurer Rossiya in the fall of 2013 - Kommersant ). And many insurers from the top twenty in terms of fees cannot stop selling because they have no reserves, they sag without sales. Some, like the Zurich company, decide to pay off losses and sell their business in Russia at the expense of shareholders. Others, like Guta Insurance, stop sales, that is, go into run off mode.

The second problem is that many insurance companies do not have a system that allows them to quickly monitor their portfolio and see the consequences of management decisions. Time usually passes between a decision being made and its tangible consequences. But insurance is very inertial. For example, even at Ingosstrakh, on February 2, a decision was made to quite harshly reduce its share in the OSAGO market, and the result became obvious only after July 1.

— So you only have non-problem clients left?

— We are talking about the structure of the portfolio. In 2013, our average MTPL premium increased by 625 rubles. Compared to 2012, the loss stabilized, the average payment - 32,094 rubles - practically did not increase. This means that we already received a positive margin under compulsory motor liability insurance in the fourth quarter of 2013. At the same time, as in previous years, it is Ingosstrakh that has the maximum average payment under compulsory motor liability insurance among all insurance companies.

— How do you reduce the share of compulsory motor liability insurance? It is impossible to directly refuse sales of compulsory motor insurance to the public. For example, in Kamchatka - in the most unprofitable region, according to the Central Bank - does Ingosstrakh have offices?

- Eat. But please note: we do not refuse anyone or impose additional services to compulsory motor liability insurance. We now have MTPL sales offices open in each region in accordance with the law. At the same time, Ingosstrakh's loss settlement office is usually located in the city center to make it convenient for people. First of all, we sharply reduced commissions to agents for selling MTPL policies. And this practically stopped our sales in the regions. In addition, our experts carefully check the correctness of applying the bonus-malus coefficient to each driver who is supposed to be included in the policy. This is done through a single RSA database. We focus on a thorough check of the car, the client, and its history.

— Haven’t sales been declining in the Moscow office?

— In Moscow and St. Petersburg there are no problems with sales of MTPL so far. The fact is that the settlement market and, if you like, the courts in Moscow and St. Petersburg are more civilized. Methods for calculating the cost of repairs in capital cities have been developed. And most importantly, auto lawyers who oppose insurers were not allowed to turn around in the capitals. But this risk also remains if the Central Bank does nothing.

For example, in Moscow, a car owner comes to the insurer about a crumpled bumper. The average price that Ingosstrakh will calculate for him under OSAGO is 30 thousand rubles. For this money, you can repair the bumper, and the client leaves “settled,” that is, with a repaired bumper. But if this is not Moscow, a so-called auto lawyer approaches the car owner with the words: “Wait, what 30 thousand rubles? Don’t agree for less than 90 thousand rubles. And if you want, let me give you 30 thousand rubles now. , and I’ll go to court with your insurance claim.” And in court, such a car lawyer has everything covered.

And the court of Voronezh or Ulyanovsk will award 90 thousand rubles for this bumper, which, according to any honest calculation, costs 30 thousand rubles. In Petropavlovsk, the number of courts under compulsory motor liability insurance for the fourth quarter of 2013 amounted to (think about the figure!) 70% of the policies issued. This means that every two out of three car owners crashed in Petropavlovsk-Kamchatsky, and the payment from Ingosstrakh did not satisfy them, and they were “forced” to go to court. There is legal chaos there. The Ingosstrakh security service has identified three local law firms that earn money together with judges. Or here’s another example: a judge in the Krasnodar Territory made 100 decisions per day, all on compulsory motor liability insurance. Everyone is against the insurers. He spent two minutes on each decision, studying the case “deeply.”

— Considering the situation with the courts and the MTPL crisis, do you continue to bring profit to the shareholder?

— Ingosstrakh is a universal insurance company, and our clients buy not only compulsory motor liability insurance. In 2013, profit under RAS will be small - about 500 million rubles. According to IFRS, taking into account the necessary additional reserves created, Ingosstrakh will show a loss.

— Why didn’t you start developing the life insurance segment? A number of bank insurers showed a huge increase in fees last year.

- This is not insurance. Reporting to the Central Bank in a form and presenting this type as life insurance, insurers include 90% of the reports insuring the risks of the borrower at the request of banks. At the same time, the commission to banks reaches 85-90% of fees. Ingosstrakh is not happy with this, since this is, first of all, a deception of clients, because there are almost no payments.

At the same time, the tariff is seven to ten times higher than the real one with payments of less than 1%. Where did you see insurance?! Real savings and pension life insurance in Russia is $400-500 million, everything else is quasi-banking schemes.

— Was insuring Olympic risks in Sochi the right decision for Ingosstrakh? Were the costs high?

— We spent about $50 million - this is a sponsorship fee, the maintenance of our structures, in particular the engineering center, which monitored the Olympic construction sites, the maintenance of experts and adjusters. The engineering center operated for three years and employed 40 people. Few people know where the data came from to report to top officials that some objects were unfinished or poorly constructed. And this was done by Ingosstrakh.

— How many insurance premiums did you receive for Olympic risks?

— The civil liability of the Sochi 2014 Organizing Committee and the risk of cancellation of the Games were insured by Ingosstrakh with limits of $250 million and $150 million, respectively. The insurance premium under these contracts amounted to several million US dollars. But since the risks were reinsured on the international market, the net premium of Ingosstrakh amounted to several hundred thousand dollars. The total liability limit for construction risks was approximately $3 billion. Our fees for this type amounted to several million US dollars.

— Were there any payments? How many?

— The largest payments for us were payments for insurance of construction and installation risks, their total volume exceeded 300 million rubles, in particular, in connection with damage to the coastal infrastructure of the Sochi cargo port at the mouth of the Mzymta River as a result of the storm, and flooding of the main Olympic village. The remaining losses are still being calculated, so I am not ready to give an exact figure. In terms of the number of losses, I can name: more than 1.4 thousand applications were received for car insurance, and more than 1.5 thousand applications for insurance of medical expenses of the Olympic and Paralympic families and volunteers. We can say that the amount of payments for these types will amount to several tens of millions of rubles. In general, the financial result of the Olympic project is negative.

— During your tenure as head of the company, the most high-profile corporate conflict in the insurance market occurred - the confrontation between the main shareholder and Czech minority shareholders. Did this somehow affect the business of Ingosstrakh?

— In general, it had no effect at all. And this expresses the strength of Ingosstrakh. At one time, the Czechs reproached me for completely groundlessly taking the position of the main owner - Oleg Deripaska. I took it for the reason that objectively this position of a long-term investor coincided with my views: Ingosstrakh should remain in Russian jurisdiction and be a leading Russian company, and shareholders with short-term speculative goals are not suitable for the company. The people who came with the main task of bargaining for more money from the majority shareholder could not get my approval.

But pay attention, now that the international group Generali has entered the capital of Ingosstrakh, and the board of directors operates as usual, without hype and scandals. Decisions are made unanimously because they are aimed at the development of the company. Generali, by the way, began to return clients whom the Czechs took to PPF Insurance.

— Have many clients been taken away?

- A whole range - life insurance, accident insurance, voluntary health insurance. The total amount of premiums for these clients was approximately 400 million rubles. At the same time, the minority shareholders did not bring a single client during their entire stay at Ingosstrakh!

— In your opinion, would such a large investor as Generali be satisfied with a minority stake in an insurer in such a promising market as Russia?

— Generali has a lot of minority stakes around the world. The only thing I am sure of is that, unlike the Czechs, he is a long-term and conscientious investor. Generali will make an informed and, importantly, conscientious decision regarding Ingosstrakh.

— Have you been offered to extend the contract of the head of Ingosstrakh?

— Yes, but my third contract is ending, and I notified the shareholder of my desire to leave a long time ago.

— Are your future interests related to insurance?

- No. I'm retiring, so to speak.

- Not early?

- No. Retirement means doing what you want and not driving to work in traffic jams. And devote yourself to family, children, sports, music.

Interview conducted by Tatyana Grishina

"The existing insurers are already fed up with everyone"