Market Trends of Russia Car Insurance Industry
Increase Sales of Commercial Vehicles
Russia's auto industry was heavily reliant on investment, equipment, and parts from overseas and was hit hard by the fallout from Western sanctions over Russia's invasion of Ukraine. The Russian commercial market experienced significant growth over the years, driven by various factors such as economic development, expanding industries, and infrastructure improvements. Commercial vehicles play a crucial role in the transportation of goods and services across the country, making them an integral part of the economy. Electric buses will be introduced faster than private cars, given the expense and the lack of public charging points outside major cities.
Rising Repair Costs Can Lead to Higher Motor Insurance Premiums
The cost of motor insurance is often tied to the value of the insured vehicle. As the prices of vehicles rise, premiums may increase to cover the higher replacement costs. Rising repair costs can lead to higher motor insurance premiums. As vehicles become more technologically advanced, repairing them can become more expensive due to the cost of parts and labor. Premiums can vary by region in Russia. Areas with higher rates of accidents, theft, or damage might include higher premiums than regions with lower risk. The corridor of the basic tariff in OSAGO (compulsory motor third-party liability insurance) for most categories of car owners is proposed to be expanded by a fourth percentage both upwards and downwards. Thus, insurers will be able to more accurately take into account car owners’ risks now that component prices are rising.
