Reasonability of development of agro-insurance in Russian Federation on the basis of mutual insurance

Abstract

Article deals with the justification of reasonability of agro insurance risk-management development in Russian Federation on the basis of mutual insurance. Nowadays this kind of insurance is carried out only by the commercial insurers, and thus are created conditions for the non-rational usage both private and government finance directing for the insurance premium. At the same time there is a successful practice of some developed countries and also Russian historical experience of mutual insurance of agricultural risks. The authors suggest to develop mutual insurance societies of agricultural risks not excepting the possibility of insurance of such kind of risks by the commercial insurers. It is pointed out that in RF mutual insurance societies for successful development will need the support of the state in the form of organizational and fiscal facilities. Development of mutual insurance societies of agricultural risks will prevent transformation of the part of the finance into the dividend for the owners of the insurance companies, and also activates the competition in the sector of agro insurance.

Mutual insurance in the entrepreneurial landscape

“…In the insurance markets of most of the countries of the world, only two types of insurance companies can be noted: mutual (MICs) and commercial ones (CICs) (Logvinova, 2010 ). Here, it is important to distinguish the notions “a type of insurance company” and “a registered form of the insurance company”.…”

“…The advantage is, for example, an opportunity to reduce the size of insurance premiums or even get insurance products free of charge in some cases. If the financial recourses of the community exceed its obligations for a certain period of time, MIC members (or their representatives) can decide to decrease the sum of insurance payments for some members or even abolish it fully (Logvinova, 2014 ). In the case of buying the same insurance products in a CIC, this scenario is absolutely impossible.…”

“…The first is competition between insurance companies of the same kind (between CICs), whereas the second is competition between insurance companies of different profiles (between CICs and MICs). However, today we can add another category to this list, implying competition between MICs (Logvinova, 2010 ).…”

Analysis of business models of takaful-fund management

“…Some researchers (I.L. Logvinova [14]) suggest introducing the Waqf construct into the agencybased model (Fig. 7).…”