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11 Jul, 2007 06:27

Insuring insurers

With the insurance sector in Russia enjoying steady growth, there is more business to reinsure the firms to protect them from the risks they take.

Almost everything can be insured today: homes, cars, health and much more besides.

But the insurers who provide this cover need protection too, and that is where reinsurance comes in.

Lloyds of London is a world leader in this, and it says it is time to get more involved in Russia.

“The economy has grown from a fairly modest size to starting to become important. There is an ambition to get it up to the fifth biggest economy in the world. If that is going to be the case, we need to be here and well involved,” stated Lord Peter Levine, the Chairman of Lloyd’s of London.

As Russia's direct insurance sector developed in the 90s, many of the companies involved covered themselves by insuring each other.

But the country's financial crisis of 1998 shook the insurance industry hard and Russian companies began to move away from risky reciprocal protection towards professional reinsurance.

Temur Batiashvili heads the Russian Reinsurance company, and says the market is growing but it is still at an infant stage.

“You have to build, first of all, a solid basis for the development. And if you build this solid development, you should grow maybe 10 or 15 % a year. It's already more than 15 years of the insurance, private insurance, business in Russia, and we are still building, because of the nature of the business,” commented Temur Batiashvili.

Insurance may be a slow-burning business the world over. But even so, foreign players such as Lloyds do not want to wait too long to get stuck in as Russia has one of the largest insurance markets in Eurasia.