Volume of car insurance to total $600-700m a year in Russia

From the moment the law on the obligatory car insurance comes into effect in Russia on July 1, 2003, the total amount of insurance contracts of this kid will be $600-700 million a year, according to the estimate made at a press conference by Director of the Russian Association of Auto-Vehicles Insurance Companies Andrey Slepnev. The Director of the Association was quoted as saying that the average cost of an insurance license will be $60-70 in the Central Federal District, while in other Federal Districts coefficients will be used, which will enable authorities to reduce the price of an insurance license to $20-30 in some remote regions. Additionally, according to Slepnev, two tariffs are expected to be introduced for car insurance, 3-4 tariffs for trucks and separate tariffs for specialized transport vehicles.

Chairman of the Council of the Insurance Association Igor Zhuk was quoted as saying that the number of insurance companies operating on the car insurance market will drop to around 50 after the law is introduced. It is due to the fact that to embrace all car owners, it will be necessary to make certain investments into the development of the infrastructure of insurance business (new offices, office equipment, rent, staff training). According to the Council Chairman's forecast, a total of 10 million contracts are expected to be made in the first year after the law comes into effect.

According to the Insurance Association's forecast, even after the introduction of the law on obligatory car insurance, the share of uninsured car owners will be 10-15 percent of the total number.

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