Russian Car Insurance Market Will Develop Rapidly in 2003

'The implementation of the law on compulsory motor insurance in July 2003 will give a serious spur to the development of the insurance industry in Russia,' said Valery Korobkov, the general director of the Rus insurance company, at a press conference yesterday. The press conference, entitled 'The St. Petersburg insurance market: results for 2002 and development prospects for 2003', was organised by the North-West office of the All-Russian Union of Insurers. 'Insurance companies working in this sphere will receive a new inflow of clients and new premiums in 2003; the structure of the insurance market will change. But the most important result of the new law will be seen in 2 to 3 years time, when this kind of insurance begins to alter people's attitude to insurance more widely. The insurance culture among the population will change,' believes Korobkov.

'Motor insurance in Russia will develop rapidly in 2003, but we must try to avoid uncivilized development of the motor insurance market,' said Natalia Shumilova, the president of the Medexpress insurance company. 'Thanks to the new law we will finally come into contact with a large number of individuals. One of the key problems for Russian insurance over the last few years has been the introduction of artificially low premiums by some insurance companies. This has had a negative effect on the development of insurance in Russia and on the mentality of the population. Later these companies go out of business because they are unable to meet their obligations to the clients, but the effects of the loss are felt by all the participants of the insurance market. That is why the development of a national insurance culture is determined not just by the attitude of the population to insurance, but also by the actions of insurers themselves,' believes Shumilova.