Policy shift: for regions with careful drivers, they want to reduce the cost of CTP
The authorities want to reduce the cost of CTP for regions with careful drivers and low fraud rates. In some regions of the Russian Federation (for example, in Chechnya, Dagestan, and Kamchatka), the loss rate for such insurance is significantly higher than in others. But other drivers pay for it. The Central Bank took care of the problem — they are working on the idea of how to make the cost of the policy more equitable, Philip Gabunia, Deputy Chairman of the Bank of Russia, told Izvestia. Among the options is to introduce an additional coefficient for risky regions or to establish a more complex structure. The idea was supported on the market. How the CTP price for Russians will change is in the Izvestia article.
How is the CTP price formed and why is it too high for some regions
The Central Bank is concerned about the unfairly high price of compulsory motor citizenship in some parts of the country. It is wrong that in some regions the loss rate for CTP is much higher, but other drivers pay for it, Philip Gabunia, Deputy chairman of the Central Bank, said in an interview with Izvestia.
The fact is that the cost of CTP as a mandatory type of insurance is clearly regulated — the Central Bank sets the boundaries of the tariff corridor. The insurance company cannot exceed this threshold. At the same time, for high-risk regions, even the maximum allowable price is not enough to cover all losses, explained Anna Yezhikova, head of the Motor insurance Underwriting Department at Absolut Insurance. She added: the shortage of fees in such regions of the Russian Federation has to be compensated by overstating the CTP price for other drivers.
This injustice needs to be corrected, said Philip Gabunia. He added that the Central Bank is working on the idea of how this will be implemented — through a geographical feature or a more complex structure.
Now, when setting the CTP price, the territorial coefficient is already applied — that is, the cost of the policy differs depending on the region of residence of the driver, said Alexander Shcherbakov, deputy head of the Department of methodology and underwriting of mandatory types of insurance MAX. This indicator takes into account, for example, traffic density and the average payout amount. However, the current system allows for a situation where drivers from regions with low accident rates indirectly pay for losses associated with high risks in other regions of the Russian Federation, the expert emphasized.
For example, the situation in the North Caucasus is indicative, the Russian Union of Motor Insurers (RSA) said. The territorial coefficient is quite low there. At the same time, the share of unfair practices, and hence the loss—making of insurers, is high. Therefore, it is worth introducing an additional regional coefficient that would reflect the real situation, according to the RSA.
They make up a ranking of the subjects of the Russian Federation from the red zone. First of all, this is a sign of an unhealthy environment, the union explained. There are a lot of accidents and a high level of fraud (this is what primarily affects the unprofitability of CTP). By the end of 2024, Ingushetia, Dagestan, Chechnya, the Kamchatka Territory and the Karachay-Cherkess Republic were included in the list of the most risky regions. The top ten also includes Primorsky Krai, North Ossetia, Buryatia, Khabarovsk Krai and Kabardino-Balkaria.
How will the cost of CTP change?
The contribution of risky regions may now inflate prices for other drivers by 10-20%, said Irina Frank, CEO of Frank Auto. However, the exact figures depend on the specific regions of the Russian Federation.
The current territorial coefficients completely ignore the signs of fraud and unfair practices, the RSA emphasized. They added: it is necessary to reconsider the approach to identifying such regions and change the tariffs for CTP. And in places where it is safer on the roads, reduce the price of the policy.
The problem of unfair pricing in CTP has existed since the very beginning of this type of insurance, said Alexey Bredikhin, director of the ACRA Financial Institution Ratings group. He explained that insurers are forced to conclude contracts in problematic regions of the country, shifting part of the losses to other clients.
However, the situation needs to be fixed, agreed Sergey Demidov, Vice President of Renaissance Insurance. According to him, one of the possible solutions is to change the regional coefficients and adjust them regularly.
A more drastic solution is to expand the tariff range so that insurance companies set the price of the policy based on the actual loss, he said. The market is already gradually moving towards this, and this can completely eliminate the problem, Alexey Bredikhin agreed.
There is another option — instead of uniform coefficients for entire regions, territories can be divided into municipal districts or even microdistricts of cities, said Alexander Shcherbakov from MAKS. According to him, this approach is used in some European countries, where the price of the CTP analogue depends on the specific car registration address.
— The introduction of an additional coefficient for risky regions may also be one of the solutions. This will make it possible to more accurately account for risks and set adequate prices for CTP. However, such coefficients should be justified and transparent in order to avoid excessive price increases for drivers from risky regions," said Maxim Kolyadov, Head of Work with Individuals at Insurance Broker AMsec24.
As a result of this innovation, for the most risky regions, the price of CTP can increase by 30-50% if the loss is completely shifted to local drivers, Irina Frank from Frank Auto estimated. For example, if the average cost of a policy there is 5-10 thousand rubles now, then an increase to 7-15 thousand looks realistic.
At the same time, for other regions, the price of a compulsory motor vehicle will decrease by 10-20%, the expert added. However, the final effect will depend on the model chosen by the Central Bank.
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