Risk assessment in insurance is closely linked to the state of the economy. Repair and treatment costs, loan and deposit rates, the rouble exchange rate, people's incomes — all of this directly affects the cost of policies, the size of claims payments and the products insurers offer. Let's look at the main links and the practical takeaways for policyholders.
Inflation: repairs, spare parts and treatment get more expensive
An insurer pays for repairing a car or an apartment or for medical care at current prices. When prices rise, payments rise, and premiums follow. This applies above all to KASKO (comprehensive motor insurance), home insurance and DMS (voluntary medical insurance).
There is a flip side — the risk of underinsurance. If the sum insured has not been reviewed for a long time while the real value of the property has grown, a payment for partial damage may be reduced proportionally: this is the rule of incomplete property insurance under Article 949 of the Russian Civil Code (unless the contract provides otherwise).
What to do
- at each renewal, check the sum insured against the current value of the property;
- find out whether the contract applies proportional settlement;
- check how wear and spare parts are calculated under KASKO.
The key rate: returns, loans and savings products
Insurers invest the premiums and reserves they collect in financial instruments. A high key rate increases their investment income, which can restrain premiums in risk lines. At the same time the rate affects the appeal of life insurance products with a savings or investment component: their returns are compared with deposits and bonds.
Through lending, the rate also affects bancassurance. The more actively mortgages and consumer loans are issued, the more mortgage insurance and borrower insurance contracts are concluded. When loans are expensive, this flow shrinks.
The rouble exchange rate: imports, spare parts and travel
A significant share of car parts, medical equipment and medicines is imported. A weaker rouble makes repairs and treatment more expensive, and this is built into KASKO and DMS premiums.
For travel insurance the exchange rate matters directly: the sum insured is usually set in euros or dollars (for example, €30,000 for Schengen countries), while the premium is paid in roubles at the rate on the date of purchase. When the rate rises, the same trip costs more to insure.
Household and business incomes
When incomes grow, people buy voluntary policies more often: KASKO, apartment insurance, DMS, accident insurance. When incomes fall, voluntary lines are cut first, while compulsory ones — such as OSAGO (compulsory motor third-party liability insurance) — remain. Businesses follow similar logic: in difficult periods, companies review employee DMS programmes and property insurance and raise deductibles.
External restrictions and reinsurance
Insurers spread large risks — industrial facilities, aviation, marine transport — through reinsurance. Russian companies' access to international reinsurance capacity is limited, and the domestic market plays a major role, including the Russian National Reinsurance Company. This affects the terms and price of insuring large corporate risks.
Demographics and health
Population ageing and rising life expectancy affect the pricing of life insurance and pension programmes, as well as demand for DMS and critical illness insurance: the older the insured person, the higher the risk and the price of cover.
Regulation as part of the "macro" picture
Regulatory decisions also affect policy prices. The Bank of Russia sets OSAGO premiums as corridors of base rates and coefficients; changes to its directives are immediately reflected in the price of a policy. Requirements for capital, reserves and disclosure make the market more stable but increase insurers' costs.
How to use this knowledge
- Review your sums insured at least once a year.
- Compare offers from several companies at every renewal — premiums change differently. The calculators are a good starting point.
- Use a deductible to lower the price without losing protection against large losses.
- For trips, buy a policy in advance and keep an eye on the exchange rate, but don't skimp on the sum insured.
- Assess the insurer's financial stability — in an unstable economy this is especially important.
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