The formation of a new state-backed reinsurer in Russia will hit the long-term growth potential of global reinsurers in the country, which will be forced to cede a percent of premium to the new entity even on existing long-term treaties.
The Russian government first revealed details of the new reinsurer back in July. The move is set to plug the hole created by a political embargo after the Ukraine crisis, but the entity will also participate in the general market, increasing reinsurance capacity in an already soft market and reducing the business for other reinsurance players.
In June the State Duma of the Russian Federation passed legislation amending the Law on Organisation of the Insurance Industry in the Russian Federation to create the national reinsurance company (NRC).
The idea has been floating around for a while, but the introduction of political sanctions following Russia’s role in the Ukraine conflict has given the plan the last needed push.
Russia, National Reinsurance Company, Regulation, Growth, Reinsurance, Insurance, Sanctions, Europe, Asia Pacific, Nicola Rautmann, Christian Engeln