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vol. XVII no. 3
According to Kotlobovsky, students at Moscow State are now learning the same skills in their RMI curriculum as students in the United States. But the industry, particularly the risk management side of things, is not as advanced as it is in other countries.
So what can these students expect upon entering the workforce? And what are the differences between RMI as practiced in Russia compared to the United States?
With the help of Kotlobovsky, State of Business visited Ingosstrakh, one of the oldest and largest insurance providers in Russia, and AIG, a multinational company that has been operating in the country for 10 years. We also spoke further with Vassily Balog and other representatives of the Russian Association of Motor Insurers and, finally, interviewed members of the All-Russian Insurance Association, the umbrella organization that advocates for the industry with lawmakers and the public. The summaries below offer a snapshot of the insurance and risk management business as it exists today in Russia and where it might be headed in the future.
Insurance in Russia was nationalized after the Russian Revolution of 1917. Domestic insurance in the Soviet Union was offered by a single agency, Gosstrakh, and insurance on foreign risks by a companion company, Ingosstrakh. With the development of the new market economy and the establishment of competition in the insurance industry, Ingosstrakh emerged as Russia's top insurer, offering 87 types of insurance as well as reinsurance for both domestic and international clients and naming among its leading customers General Electric, Kodak and Siemens.
The company had $800 million in annual premiums written in 2004, and according to Tatiana Doubrovskaya, general director of Ingosstrakh, the goal is to reach $1.4 billion by 2007.
Having been an active player in voluntary medical insurance business for more than a decade, Ingosstrakh has also begun to offer obligatory medical insurance. In just six months it has sold
5 million policies and expects that number to go to 15 million by the end of 2005. Ingosstrakh is also taking the bold step of constructing a medical center to meet the continuing demand for quality medical care in Russia.
An accident involving two aircraft in 2004 demonstrated the quality of the company's product when the family of one of the victims in the crash - the only individual insured with Ingosstrakh - received compensation equal to that received by all the other 68 victims' families combined.
Ingosstrakh executives are well positioned to comment on the insurance industry in Russia and the development of risk management. "Many managers know the words 'risk management' and use the term, but few practice it on a full-time basis," said Edgar Pleskanovsky, Corporate Development Department deputy director for Ingosstrakh. He notes that there are exceptions, such as Aeroflot, the giant air carrier; big oil companies and banks. |
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