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Russian National Reinsurance Company – the role and influence of the new player.

On10th January, Insurance Institute of London (IIL) held a lecture on a new reinsurance player in the Russian market – Russian National Reinsurance Company (NRC).

Mr. Nikolay Galushin, the president-chairman of NRC, was invited to update the London market on NRC’s current opportunities and its strategic business development focus.

The talk was organised and chaired by Charles Catt, the CEO of Challenge Group Brokers (UK) and member of the IIL organising committee. Mr. Catt commented that it was his firm opinion that the company would “certainly” be successful and an important and influential addition to the Russian (re)insurance market under the guidance of Mr. Galushin.

One of the main purposes of NRC is to support the Russian domestic insurance sector with provision of protection for sanctioned risks, however the company is aiming for a more diversified portfolio. The share of the sanctions-related risks will not exceed 15%.

The presence of NRC in the market will affect foreign reinsurers operating in Russia: NRC is anticipated to capture around 30% of the market, however it sees itself more as a “partner” of the existing players, considering that the Russian market is in need of additional capacity.

By law, which came into effect on 1st of January 2017, Russian insurance companies now have to offer NRC 10% of its outward reinsurance. Business will be written on NRC’s net retention. Net retention level is 1bln to 2,5bln rubles (17-42mln USD) per risk or contract. Mr. Galushin has forecasted that premiums premium income in the current year will be approximately 7.5 billion rub and aggressive growth will double the premium income by 2019.

According to NRC’s press release during the first week of January the company collected 570 mln rubles of premiums.