In 2021, the agricultural insurance system in Russia will receive an expanded legislative framework that will make it possible to ensure its operation as the main mechanism for compensating agricultural losses incurred as a result of natural disasters. The prospects and problems associated with the planned transformation, as well as the results of agricultural insurance in 2020, were discussed by representatives of the Federation Council, the Ministry of Agriculture and the Ministry of Finance of the Russian Federation, the Bank of Russia and the insurance community at a meeting with the press, which took place during the organization of the National Union of Agricultural Insurers (NSA) in Moscow.
One of the main topics of the event was a bill prepared by a group of deputies and senators with the active participation of the Ministry of Agriculture and the National Assembly of Armenia in developing its concept. The draft amendments to the law on state support for agricultural insurance are aimed at integrating the mechanism of agricultural insurance into the system of protection of agricultural production in the event of a natural emergency. It provides for the expansion of the agricultural insurance system with state support by introducing into it the concept of a new line of insurance - in case of an emergency announcement. The bill was adopted as a basis by the State Duma in the first reading on March 17.
On the part of the group of legislators who authored the bill, the head of the Agrarian Committee of the Federation Council Aleksey Mayorov spoke, who noted that the restoration of the agricultural insurance system is a task that was set by the Presidium of the Council of Legislators in 2018 and is in the focus of the Committee's constant attention. The committee, together with the NSA, with the participation of the Ministry of Agriculture and the Bank of Russia, carried out a large-scale work to study the situation in all federal districts of the country. Eight district meetings were organized with the participation of regional ministries of agriculture and agrarians, which covered almost all constituent entities of the Russian Federation. “The discussion showed a high interest of the agrarian community and governing bodies of the agro-industrial complex of the constituent entities of the Federation in the organization of insurance coverage. At the same time, a number of existing problems were identified, ”the senator said. “A general request from the regions showed the need to expand the coverage of insurance, simplify insurance conditions for farmers both in terms of concluding contracts and obtaining insurance payments, increasing the availability of insurance coverage,” stressed Alexey Mayorov, who noted that the findings were used when working on the bill on insurance of the risk of emergencies.
The direct organization of state support for insurance protection at the federal level is under the jurisdiction of the Ministry of Agriculture of Russia, whose position was presented at the press event by Deputy Minister Elena Fastova. She noted the importance of the task of expanding the insurance system for the agro-industrial complex, which, despite the difficulties, has shown that it is steadily “standing on its feet”. Elena Fastova noted that in 2021 the ministry doubled the limit of state support funds allocated for agricultural insurance - from 2 billion rubles a year earlier to 2,2 billion rubles. The funds have already been distributed and brought to the regions.
The Ministry of Agriculture considers the agricultural insurance mechanism as one of the basic ones, allowing to remove some of the risks not only from the agricultural producer, but also from the state. Elena Fastova noted that in animal husbandry insurance in Russia a significant indicator of insurance coverage at the level of 28% has already been achieved - about 8 million conditional heads are provided with policies, while there are regions in which more than 50% of the livestock are insured. Insurance of commercial aquaculture started in 2020 - about 2 thousand tons of fish were provided with insurance coverage, in 2021 this figure was already exceeded 3 times. According to the Ministry's forecasts, in 2021 the level of insurance coverage will be at least 8% of the sown area, and by 2025, insurance coverage is projected at 30%. The development of crop insurance should be facilitated by the introduction of insurance against the risk of emergencies.
The Bank of Russia, as the regulator of the insurance market, also attaches great importance to agricultural insurance, including agricultural insurance with state support, '' Olga Shelepneva, head of the Department of the Insurance Market of the Central Bank, said in her speech. “This is primarily due to the fact that our agro-industrial complex is a strategically important industry - and the industry that is most susceptible to climate risks, like no other. Insurance is the main protective mechanism, ”she said. Olga Shelepneva explained that from the point of view of a client-agrarian, the attitude to insurance coverage depends on two factors: the reliability of insurance companies and the attractiveness of conditions. “The changes that took place more than a year and a half ago have shown that if legislation flexibly and in a timely manner responds to the needs of policyholders, then this has a beneficial effect on the industry that this or that type of insurance is supposed to protect, in our case, agricultural insurance. Therefore, we are actively involved in the work on the bill, which is now in the State Duma. " “For farmers, from our point of view, this should be an interesting product,” Olga Shelepneva assessed the proposal to introduce emergency insurance.
Presenting the position of his ministry, Roman Tochilin, Deputy Director of the Financial Policy Department of the Ministry of Finance of the Russian Federation, called the forthcoming agricultural insurance bill "critically important from a social and state point of view" along with innovations in the field of home insurance against emergencies. “We perfectly understand all the time constraints facing the authors of the project, and we will make every effort to make the bill come out as soon as possible,” said the representative of the Ministry of Finance.
In 2020, agricultural insurance with state support became the fastest growing segment of the insurance market in Russia: its volume grew by 54% over the year, which became an absolute record in the year for which the entire market increased by 4%, the President of the NSA Korney Bizhdov said in his speech. In general, the agricultural risk insurance segment in terms of insurance premiums of 8,1 billion rubles today is comparable to the marine insurance segment. Korney Bizhdov stressed that the NSA is already preliminary preparing for the implementation of new provisions on insurance of emergency risk: if the bill is adopted in the first half of the year, the launch of a new direction of agricultural insurance with state support is scheduled for autumn, during the winter sowing insurance period. In this case, in 2022, the procedures for resolving losses in case of emergencies will be worked out in practice, and in 2023-2024 it will be possible to massively introduce a new direction, the President of the NSA explained.
The assessment of the processes in agricultural insurance and the attitude of the insurance industry to the prospects for innovations were presented at a meeting for the media by top managers and heads of areas of the companies belonging to the NSA, JSC AlfaStrakhovanie, PJSC IC Rosgosstrakh, JSC IC RSHB-Insurance.
“During the work of the Unified Association of Insurers of the Agroindustrial Complex, 2020 was marked by the largest payments,” said Sergey Prostatin, General Director of JSC IC RSHB-Insurance. - Under insurance contracts with state support, 2020 billion rubles were paid in 2,3, which is 4 times higher than payments in 2019.The situation in key regions for the country's agriculture turned out to be indicative in terms of the fact that even in the most territories, favorable from the point of view of climate, may experience unfavorable weather conditions, leading to significant losses. And, on the other hand, she showed how the insurance community solves these problems, ensuring the continuity of the production process of agricultural producers. We see a tendency of growing interest in insurance on the part of farmers. A striking example is the Stavropol Territory. In this region, after significant crop losses and payments from insurance companies in the amount of 1,5 billion rubles (according to the NSA), the volume of insurance in 2020 increased by more than 3,5 times. "
Tatyana Lavrova, Deputy Director for Corporate Business at AlfaStrakhovanie JSC, noted that there are tendencies in animal insurance related to the concentration of risks. In particular, domestic pork producers entered the TOP-5 of world producers - the livestock is growing very strongly, and at the same time the density of pig farms is increasing, the density of insurance amounts is growing. “From the point of view of insurance, this means that a large sum insured is concentrated in one place, and therefore one loss can lead to losses. And this is the main trend that we now see in animal insurance. Because most of the risks are the risks associated with dangerous infectious diseases, ”explained the representative of the insurer. As follows from the reported data, over the past 3 years, the company "AlfaStrakhovanie" annually carries out the settlement of losses from infectious diseases of the livestock, in the amount exceeding 100 million rubles. The list of infections is not limited to cases of ASF and avian influenza: at the end of 2020, about 80 million rubles were insured in this company for losses from the death of cattle.
According to Dmitry Romani, Head of the Underwriting Department of PJSC IC Rosgosstrakh, for insurers “it is very important to develop the institution of support for insured farmers in the regions”. In his opinion, “the relevance of the law on emergencies is now very high, and support is now needed here, among other things, so that (...) the maximum number of regions simultaneously join this program” - this will allow, in particular, to avoid anti-selection of risk. Rosgosstrakh in the field of agricultural insurance in 2020 increased its presence in the regions almost doubled compared to 2019. “We continue to look for entry points and growth points in new regions,” said the representative of Rosgosstrakh.
“The tasks facing the agricultural insurance system are large-scale,” comments the President of the National Insurance Agency Korney Bizhdov. - According to the UN World Food Organization, over the past half century, the average number of annual natural disasters affecting agriculture has increased several times in the world. Russian farmers are under pressure from the same processes, and the task of the insurance community is to create an effective and stable mechanism in partnership with the state to support the sustainability of the agro-industrial complex for the coming years. "
The press event "Results of the development of agricultural insurance in 2020. Prospects for the development of financial protection of the agro-industrial complex of Russia in connection with changes in legislation" was held with the participation of leading business, general political and industry media. More than 50 participants from the regions - journalists and specialists from the agro-industrial complex - connected to the online broadcast. The event was moderated by Dmitry Rylko, Director General of the Institute for Agrarian Market Studies.
According to Federal Law No. 260-F3 "On State Support in the Field of Agricultural Insurance", in Russia, within the framework of a centralized system, state support is provided for insurance of risks in crop production, livestock farming and commercial aquaculture. Since January 1, 2016, a single all-Russian association, the National Union of Agricultural Insurers, has been operating on the agricultural insurance market with state support. Only insurance companies-members of the union have the right to conclude insurance contracts with state support; insurance is carried out on the basis of uniform standard rules for each insurance program.