Individual insurance products: is there a real choice for Russians?

Abstract

The article analyzes the level of competition of insurance product offerings in the following four markets using the Russian market as an example: (1) life insurance, (2) accident and disease insurance, (3) voluntary health insurance and (4) pension insurance. The purpose of the study is to assess competitive dynamics in the insurance product markets during the period under review. Relevant data of the Expert Rating Agency for 2018-2021 were used as the study basis. The study methodology is based on the assessment of the competitive situation using the SV matrix, which is based on HTSV (level of differentiation within the dominant group) and CRSV (cumulative market share of the dominant group). The study shows that the Russian insurance market in 2018-2021 was quite diverse in terms of dominance. Most individual insurance products belong to the B4 quadrant of the SV matrix (a natural oligopoly), yet, the situation with the dominant group regarding types of insurance under study is significantly different, since the number of dominant players varies from 2 to 10, considerably affecting a real consumer choice, however, among the markets under study, there is none with low concentration or without a dominant group or dominant leader. In the VHI market, the choice is quite large, while the presence of a big dominant group of eight companies suggests formation of the two-tier companies. The top echelon sets quality standards and dominates by price, while other companies can compete with the leaders due to niche offerings and price factors. The pension insurance market is an example of a significantly reduced consumer choice: in 2018, it is in the RO quadrant with a relatively “weak” dominant group, while by 2021, a hardly differentiated oligopoly of 5 companies has been formed, controlling 95% of the market. Emerging players with the market and institutional opportunities similar to SOGAZ make significant changes in the market structure, as in the case of personal insurance market, wherein SOGAZ has absorbed the largest player, transferring the market from an oligopoly of seven companies to the actual dominance of the one.