The agro insurance segment based on the Central Bank dropped by 36% to RUB 1.66 billion in the 1H 2018. The biggest contribution to the segment was made by agro insurance without state support (+2.8% to RUB 904.3 million), according to the National Association of Agriculture Insurers (NAAI).
Also, a big contribution was made by the subsidized livestock insurance market (RUB 457.1 million). According to Korney BIJDOV, the NAAI President, “agro insurance without state support is
extremely heterogeneous – most agreements are settled in several regions of the Volga area, while a major part of premiums originates from smaller agreements on insurance of large and medium agricultural production. Thus, reduction of the total number of agreements without state support, caused by macroeconomic trends, did not affect overall demand for insurance coverage which is mainly required for medium and large farms. Under conditions of decreasing state support, livestock producers must also reduce their insurance coverage,” added BIJDOV.
He described the situation for crop production as well. “Crop production in 2018 is in the most vulnerable position, in terms of access to agro insurance with state support. Crop farmers, as a rule, are usually tightly bound by planting periods and can’t wait until federal decisions on subsidy allocation are made to conclude insurance agreements. This is an extra argument in favor of the system recovery, when subsidies for insurance should have a special purpose”, said BIJDOV.
The total number of insurers in the agro insurance market in 1H2018 was 27, 11 of which were active. The total number of concluded insurance agreements amounted to 38.8 thousand units (vs 42.4 thousand a year ago).