Why the increase in the cost of insurance policy is another hoax
Why the Central Bank decided again to go on about the insurers.
You already know about the coming increase in insurance tariffs in compulsory insurance of civil liability? Probably knows that almost every second motorist. You support this measure? You are a patriot and approve of everything the government is doing? Then try to explain the validity of the new increase in tariff corridor on the insurance policies planned by the Central Bank of the Russian Federation this summer. Most likely, the insurance will rise in price since the autumn of this year. So amid a sharp rise in price of fuel at filling stations autumn gift to the Russians after the summer holidays provided.
But let’s look at why the Central Bank suddenly decided to make us in this year of unexpected liberalization of tariff corridor CTP? Maybe, though we don’t know the great mystery of the main Bank of the country, which only recently began to regulate the insurance market in the country? Maybe only the employees of the Central Bank known the right way to restore order in the insurance market? I wonder how they are going to build the future of the insurance market? One the constant rise in prices on OSAGO to bring order to this market are unlikely to succeed. Or they like saying “beat the that strangers were afraid”? Let’s face it.
If anyone remembers, recently, the insurance market in the country was controlled by the Federal financial markets service of the Russian Federation (abbreviated as FFMS). Remember when this service was quietly raised the rates for insurance? Can’t remember? But the fact that the tariff increase was not simple, despite the superinflyatsiya in the country in past years. And now the FFMS was abolished, transferring the authority to regulate the insurance market to the Central Bank, which rapidly began to raise tariffs for mandatory insurance.
It is only recently, the Central Bank substantially increased the cost of insurance policies by changing the tariff corridor. Where else? And now we are waiting for a tariff increase due to the expansion of the boundaries of the tariff base value of insurance policies. Moreover, this price increase is unplanned.
So in the next few years we are probably waiting for the next increase in the cost of insurance. This time is already planned.
We will remind that recently the Central Bank approved the expansion of the boundaries of the tariff corridor in the CTP at 20 percent in both directions. What does it mean? This means that the bottom bracket of the base cost of insurance will be reduced by 20% – 3432 RUB (as in force at the moment) to 2746 RUB the Upper limit of the basic rate CTP will also increase by 20% from 4118 to RUB 4942 Thus, the lower limit of the basic cost of insurance will be reduced by RUB 686, and the upper limit will increase to 824 RUB
Now let’s calculate how much the average driver pays for vehicle insurance policy today and how many will pay after the approval by the Central Bank of new tariffs this summer. So, today, with the grid tariff, RUB 3432-4118 drivers in Russia pay for insurance policy on average 5800 rubles. The new rates, the average cost of insurance will amount to 7,000 rubles. As you like math, which was invented by the employees of the Central Bank? At this point, probably, many motorists remember the Federal financial markets service of the Russian Federation, as a delicious food produced by the Soviet guests in the USSR.
But, alas, the Central Bank is not the FFMS. The Central Bank know the math firsthand. But that’s not all. Know the secret of obtaining money honestly? That when you “wear” you this even suspected. You ask, where’s the hype? Because the lower limit of a tariff corridor is reduced, so many accident-free drivers, do not fall for a long time in an accident, will receive an additional discount when you purchase insurance that will mean that the new rates for many drivers the insurance policy will be cheaper. But do not hurry to rejoice.
The fact that the Central Bank plans since the summer to introduce new parameters that affect the cost of the policy. Recall now that when calculating the total amount of the cost of insurance, the insurers apply the various correction factors, is divided into five groups: experience, driver’s age, the number admitted to driving the vehicle drivers (their expertise and experience are also taken into account), the region of operation of the vehicle, the presence of accident-free experience, etc.
In the case of approval of the new tariffs, the Central Bank will increase the number of categories (factors) from 5 to 50. That is, very soon the insurers when calculating the cost of CTP policy can apply up to 50 different correction factors. We are talking about exact ratios at the experience and age of the driver purchasing insurance policy. So now every extra year of driving experience will change the MSC driver is not only the experience for accident-free driving (the coefficient of bonus-Malus MSC), but also to change the factor for the increase in experience. Also now every extra year of age of the insured will affect the final cost of insurance.
But the new rates and new calculation of the cost of the policy CTP, which will shortly apply to all insurance companies, is a hidden and arrogant method of unplanned increased cost of insurance. Because, as always, the devil is in the details. For example, if you have the new rates will decrease the lower boundary of the tariff corridor (for example, for accident-free driving), so how is the new to 50 coefficients used in the calculation of the final cost of the policy, you insurance policy may be more expensive. In particular, if you are a young driver.
That is really the insurance policy will become cheaper only for those who have a huge experience of driving, who at an advanced age and for those who in recent years has not been in an accident. But they are minority. Hence, the cost of insurance will increase for most drivers.
In addition, since the summer or autumn of this year the Central Bank intends to start a real liberalization of the insurance market of the compulsory third party liability. However, it is only while the plans for the project developed by the Russian Union of insurers. Under this project it is proposed to abandon the regulation of various margins and factors used in the CTP market. Insurers offer the Central Bank to adjust only the boundary of the tariff corridor base cost of insurance. The remaining adjustment margins insurers want to assign as they want. That is, freely, given the competition in the market. And what’s worse – the Central Bank really plans to do. Moreover, the Central Bank actually plans to release the insurance market in the free swimming by 2020. Again, all this at the suggestion of the Russian Union of insurers. I hope CB will be wise enough not to do that because it will inevitably lead to the fact that the cost of the policy CTP will be space.
And what do the authorities say? Know what’s most amazing, our powers that be because, perhaps, stayed too long accustomed not to notice such problems. Then there are those who have the least to react in the insurance market, pretend that nothing is happening. In principle, we are not used to. In our country probably a whole generation of politicians who really think that there is no problem.
But if you dig deeper, immediately visible to all the problems and cracks in various areas. The only trouble is that no one wants to dig. It is impossible to dig without dirtying the hands or rubbed corn. It turns out that the Central Bank invents outright simple methods of increase of tariffs, referring to some bright future right to the insurance market. For example, taking a sample of the insurance market in Europe, where he was released by the state in the 90’s, leading eventually to the decrease in the cost of insurance in General. But excuse me, we’re not Europe. We have other income, like GDP per capita.
No sooner do prices like in Europe? And the fuel would have time to think, and then really soon the price tags at the pump will as in some countries of the European Union.
Unfortunately, to abandon the increase in insurance most likely will not happen. Because in this way the Central Bank is trying to reassure insurers that have long been attacking the Government of the Russian Federation, mailing letters with requests to help. We have, according to them, the situation on the insurance market insurance catastrophic. Insurers claim that are suffering huge losses because of insurance. As a result, recently in the insurance market, apparently, was some kind of collective collusion of insurance companies who have suddenly and in unison (even it is strange somehow if it’s not a conspiracy) began under various pretexts to put obstacles in the design of the insurance policy. More about this you can read in our material.
And after the latest strange developments in the market and after approval again at his post of Chairman of the Government Dmitry Medvedev, the Central Bank unexpectedly announced the expansion of the boundary of the tariff corridor. What is it? Our powers went on about the insurers really believed that all insurance companies are poor and miserable and are not able to operate on the market of compulsory third party liability insurance?
And you know what will cause another increase in the cost of insurance? Of course, to an even greater number of drivers who will drive without insurance. Yes, already with the current tariffs in the country are driving a lot of drivers without insurance policies. And this figure grows approximately proportionally to the prices in the shops. Poorer people in the eyes. Do with rising you could not wait? We understand that the Central Bank is asleep and sees how fully will establish insurance market, drawing a bright future when all drivers will pay exorbitant prices for insurance. But it is clear that today we can not go on about the insurance companies, getting up again almost directly into the pocket of ordinary motorists, which already in recent years climbed several times?
The worst thing that we, in fact, to do something can not do anything. Who hears us? Let’s at least write about it on the net and to comment on the latest news about increase of insurance rates. Maybe the employees of the Central Bank will Wake up the conscience. What can you do? Not to buy insurance? Not an option. It is a violation of the law, and the law must be respected.