n a e t 0 6
An u lR por 2 0
O V E R A L L T R A N S P A R E N C Y
O V E R A L L T R A N S P A R E N C Y
AnnuAl RepoRt 2006
Address of the Chairman of the Board and the General Director Human Resources 39
to the Shareholders and Clients of Open Joint-Stock Insurance
Risk Management 43
Company Ingosstrakh 4
Insurance Risks 45
Competitive Ability 7
Financial Risks 45
Quantitative and Qualitative parameters of the Insurance Market 8
Credit Risks 46
Key trends in the Russian Insurance Market in 2006 11
operational Risks 46
Current Positioning of Ingosstrakh in the Market 15
Strategic Goals of Ingosstrakh 21 Communications and GR 49
Implementation of Ingosstrakh’s Main Strategic projects 22 Relations with Governmental organizations and nGos 50
Performance Results in Core Business 25 pR Activities 50
property and liability Insurance for legal entities 26 Sponsorship and Charity 51
Special Risks Insurance 27 Key Financial and Economic Indicators 53
Cargo Insurance 27 Audit opinion on the accounting reports 54
Insurance of Aviation and Space Risks 28 performance Results 55
Insurance of Vessels and Ship-owners’ liability 29 Financial Strength Ratings 55
transport operators’ Insurance 29 Statement of income reporting for the period ended 31 12 2006 56
Credit Risks Insurance 30 Balance Sheet 57
Voluntary Medical Insurance 30 largest Insurance events of Ingosstrakh in the last Years 59
Motor Insurance 31 Bank Details of Ingosstrakh 59
tourist Insurance 31 Affiliated Companies 61
personal Insurance (Ingosstrakh-life) 32 Foreign network 62
Regional network 33 Representative offices of Ingosstrakh Abroad 62
Reinsurance 34 Affiliated Companies Abroad 63
Marketing 34 Affiliated Companies in Russia 63
Investment Activities 36 History 65
Address of the Chairman of the Board and the General Director to the
Shareholders and Clients of open Joint-Stock Insurance Company Ingosstrakh
ladies and Gentlemen, In 2006, the Company improved its business and partner relations with
corporate and private clients based on professionalism and in-depth
We hereby present to you the Annual Performance Report of Open Joint-
understanding of goals and objectives of the insurance business. In the
Stock Insurance Company Ingosstrakh for 2006.
reported period, Ingosstrakh strengthened its leadership position in the
The previous fiscal year was a success for the Company. The premium Russian insurance market and, despite tougher competition, preserved its
income grew by over 20%, total assets of Ingosstrakh increased by 35% leadership in voluntary insurance — motor insurance, property insurance,
and amounted to RUB 45.4 bln, and year-end actuarial reserves increased liability insurance, special risks and travel.
by 38% and totaled RUB 34.3 bln. Regardless of the current market trends,
Ingosstrakh managed to stabilize the loss ratio both for the Company as Another Ingosstrakh’s attainment in 2006 was that international rating
a whole and for some of its business divisions. Combined ratio for 2006 agencies Standard&Poor’s and Moody’s Investors Service revised its rating
was about 97, 3%, which is a perfect result for the composite insurance upwards. Once again, experts confirmed high business reputation of In-
company. Last year, Ingosstrakh earned a record profit for the Russian in- gosstrakh. Standard&Poor’s raised its financial strength rating and insurer’s
surance market of about RUB 2 bln. At this, 2006 was a year of large com- counterparty credit rating to ВВ+ with a stable outlook. The Company’s
pensations, but high-quality professional reinsurance protection enabled rating under the Russian scale is ruAA+. Moody’s Investors Service up-
Ingosstrakh to meet all its obligations to the clients. graded Ingosstrakh’s insurance financial strength rating under the inter-
national scale to Ba1, with a stable outlook. At the same time, Moody’s by the experts of Interbrand Group, the international consulting company.
Interfax Rating Agency announced upgrade of the long-term credit rating In 2006, the Company received main insurance award “Golden Salaman-
of the Company at Aа1.ru according to the national scale. Russian Rating der” for the Best Insurance Company in Russia. Besides, last year, Ingoss-
Agency Expert RA affirmed the highest rating A++ of Ingosstrakh for the trakh won the all-Russian contest Russian Business Elite. The Company was
fifth time. awarded for the “Valuable contribution in development of the national
insurance system”. In May 2006, Ingosstrakh received the National Award
Today, Ingosstrakh is one of the largest universal companies of the federal
of the Financial Press Club of Russia “Golden Diploma 2006 for Information
level with the highest financial stability and well-balanced insurance port-
Transparency and Impeccable Business Reputation”.
folio. Our services are available not only in Russia, but also abroad. Ingoss-
trakh stands for high reliability and impeccable fulfillment of its obligations Summing up, we are optimistic about the future. In 2007, Ingosstrakh will
to the clients, to a large extent thanks to its reliable reinsurance programs. celebrate its 60th anniversary. We are entering this year as a committed
Among our reinsurance partners, there are leading international compa- team with ambitious and yet realistic strategic plans, unique insurance ex-
nies AIG, Allianz, AXA, CCR, Gen Re, Hannover Re, syndicates Lloyd’s, Mu- perience and significant financial resources. We are convinced that we will
nich Re, Partner Re, QBE, SCOR, Swiss Re, Transatlantic Re, XL Re, etc. cope with our main task — to provide our clients with insurance services
that meet international quality standards.
In 2006, Ingosstrakh was awarded of many prizes. For the second year in a
row, Ingosstrakh became the only insurance company in the domestic mar- We are grateful to all our clients for trusting us and to all our partners for
ket among 40 most valuable Russian brands according to the list compiled mutually beneficial multi-year cooperation.
Chair of the Board General Director
S.А. Goglenkov А.V. Grigoriev
Quantitative and Qualitative Parameters of the Insurance
Market. Key Trends in the Russian Insurance Market in 2006
Higher market growth can be attributed mainly to two factors:
Quantitative and Qualitative increase in compulsory insurance (primarily, compulsory motor TPL
parameters of the Insurance Market insurance and compulsory medical insurance1);
sustainable progressive advance of classic voluntary insurance, includ-
ing real life insurance.
According to the Federal Insurance Supervision Service, as of January 1,
2007, there were 918 companies in the state register of insurers, includ- Development of classical voluntary insurance (except life insurance) was im-
ing reinsurance companies. 886 insurers reported in 2006, among them — pacted by insurers’ pursuit of universality. The breakdown of the market by
780 composite insurance companies and 106 special insurers, including 56 companies shows that in 2006, 145 companies offered life insurance (29
companies that offered only compulsory medical insurance and 50 compa- less than in 2005), 691 — personal insurance (49 companies more than in
nies — personal insurance, including life insurance. 2005), 633 — property insurance (9 companies more). As the total number
of players in the insurance market decreased, the number of companies that
In 2006, the development trends in the insurance market were positive.
deal with all types of insurance except life insurance went up. This proves
Aggregate insurance premiums increased by 22.7% versus previous year
that companies choose to be composite insurers with special emphasis on
and totaled RUB 602.1 bln, whereas in 2005 insurance premiums grew
portfolio structuring. Primarily, this is due to the growth of the retail sector.
only by 4%. In 2006, insurance compensations amounted to RUB 345.2 bln,
which is an increase of 25.8%, while in 2005 insurance compensations flow 1 Hereinafter, the insurance market is analyzed without taking into account compulsory
was negative (–10.8%). medical insurance.
Insurance premiums (contributions) and insurance compensations in 2006 (RUB bln)
Insurance Rate of growth Insurance Rate of growth
premiums vs. 2005 compensations vs. 2005
1. Voluntary insurance:
Life insurance 16 0 –36 9% 16 6 –33 6%
Personal insurance (except life) 76 8 20 1% 41 9 9 4%
Property (except liability insurance) 227 9 22 8% 64 6 40 8%
Liability insurance 16 3 1 0% 14 19 9%
2. Compulsory insurance:
of members of armed forces and eligible persons 53 15 8% 42 2 2%
of passengers 05 –0 6% 00 14 8%
Compulsory motor TPL insurance 63 9 18 9% 27 5 20 8%
Market total without compulsory medical insurance 406.8 16.2% 156.2 14.1%
If we assume that companies who have been in the market for over three Although the comparative premium trend in the life insurance market is
years are permanent players, then there are 670 permanent companies. still negative, real insurance has started to develop. In 2006, the volume of
Their aggregate premium (without compulsory medical insurance) was real life insurance was slightly less than RUB 13 bln, and premiums in this
75.4% of total premium in 2004, 92.2% in 2005, 97.2% in 2006. As can be segment of life insurance market almost doubled versus the same period
seen from above, this group of companies plays a key role in the whole in the previous year. Not all real life insurance is long-term or endowment
Russian insurance market, and any change in the number of participants individual life insurance — the leading position belongs to the corporate
either upwards or downwards will influence the aggregate amount of the employees’ insurance, but in any case there are few tax optimization pat-
insurance premium in the market by up to 10% per year. terns.
First 50 companies of the group of permanent insurers received 72.4% of In the personal insurance segment, the largest share is still taken by vol-
premium in 2006, in 2005 — 64%, in 2004 — 52%. untary medical insurance. Higher premiums in the segment build on ap-
preciation of the policy of voluntary medical insurance and deficit of skilled
In 2006, 168 companies offered compulsory motor TPL insurance (12 more
personnel, which causes more and more employers to offer compensation
than in 2005). The concentration in this type of insurance is higher than in
packages with medical insurance to their employees.
other types of insurance — 88.5% premiums go to 50 companies.
Accident insurance is another segment of personal insurance market. Here,
higher premium was driven by explosive growth of mortgage lending in
2006. In case of mortgage, many insurers classify life insurance as personal
Continued economic growth in Russia, in particular, higher capital invest-
ments from all sources of finance, as well as unprecedented increase in
sales of brand-new foreign-manufactured cars directly influenced insur-
ance premium in the property insurance market and caused its share of
the total insurance market to increase. Past year was a milestone for the
automobile market — sales of brand-new foreign cars reached a million
and exceeded the volume of sales of domestic cars.
After seasonal premium growth in the 1st quarter of 2006, voluntary liabil-
ity insurance market returned to the state characterized by a slow growth
rate because of the following factors:
lack of tax incentives for voluntary liability insurance;
uncertainty about such future imputed types as liability insurance of
hazardous production facilities, professional liability, etc.
Higher premiums for compulsory motor TPL insurance built on objective
growth of car fleet in Russia and were significantly influenced by the peak
As the growth of different types of insurance was unequal, the total market
of tenders for insurance of car fleets of budget-supported organizations
share of personal insurance premium increased from 14.1% in 2004 to
and state agencies that happened in 2006 and practically in all the regions
18.9% in 2006, for property insurance — from 40.9% to 56%, for voluntary
liability insurance — from 3.3% to 4%, for compulsory motor TPL insur-
ance — from 13.1% to 15.7%. The total market share of life insurance Total volume of authorized capital of all Russian insurers was RUB 150.2 bln.
premium reduced from 27.3% to 3.9% for the same period. It grew by 5.3% versus 2005.
Growth rate of total capital slowed down as compared to the previous slow change in the number of large insurers with authorized capital
years, which resulted from two processes in the insurance market: of over RUB 500 ml who increase their capital at a maximum speed
for all groups at the level of 20%. Authorized capital of such insurers
accounts for nearly 70% of the total authorized capital in the insur-
quick decrease in the number of companies with authorized capital
of up to RUB 120 ml, which was caused by the Federal Insurance
Supervision Service’s policy of crowding out of insurers with insuf-
ficient rate of capitalization and/or pre-arranged transactions. At the
same time, several insurers moved to the group with higher volume
of authorized capital. For this reason, the number of insurers with au-
thorized capital from RUB 30 ml to RUB 120 ml increased just slightly.
Almost one half of all insurance fees in the market (except compulsory
medical insurance) go to large federal-level insurers with authorized
capital of over RUB 1 bln. At this, the largest number of insurers has
authorized capital of up to RUB120 ml, which puts them in the “hazard
area”. Such insurers most often bear a risk of lack of funds to pay for
authorized capital, and they are the first to be acquired or taken over
by financially more powerful insurers. In 2006, the share of insurance
premium of insurers with authorized capital of over RUB 1 bln under-
went the largest growth of 4 points. Business volume of smaller insurers
who exit the market and have authorized capital of up to RUB 30 ml
reduced from 2% to 1% in the total volume of insurance charges.
Breakdown of insurance companies by authorized capital
Authorized Capital 31.12.2002 31.12.2003 31.12.2004 31.12.2005 31.12.2006
Up to RUB 30 ml 1 142 1 006 563 312 129
RUB 30–120 ml 178 257 452 468 470
RUB 120–500 ml 60 93 200 227 246
RUB 500 ml – RUB 1 bln 21 26 39 38 42
Over RUB 1 bln 7 15 26 30 31
Key trends in the Russian Insurance In 2006, such financial factors, as well as federal insurers’ ambition to in-
crease their business volume and properly balance their insurance portfo-
Market in 2006
Fewer participants in the insurance market caused by the exit of
Main reasons of insurers’ exit from the market are:
termination of activities of the companies that couldn’t for some rea-
sons increase the authorized capital to the corresponding amount;
voluntary termination of activities because of low efficiency of trans-
actions under some type of insurance;
financial insolvency because permissible level of insurance compensa-
tions and business costs was exceeded.
Some insurers, especially regional subsidiaries, became affiliates
of the federal-level companies, and smaller market participants
were taken over by the larger ones. Efforts to establish insurance
groups, holdings, business mergers, etc. intensified.
During 2006, insurers fulfilled the requirements to increase authorized cap-
ital and ensure real solvency pursuant to the rules of the Ministry of Finance
of the Russian Federation on placement of premium reserve and standards
imposed on the composition and structure of assets for equity capital.
lios became the reason for accession (and are catalysts of this process in became more active, and in 2006 started to convert them into full-fledged
2007) of small and medium regional insurers in insurance groups controlled subsidiaries.
by insurers in the most developed constituent entities of the Russian Fed-
In 2006, 11 foreign insurers entered the Russian market, 4 companies an-
eration. In 2006, 17 transactions got coverage in mass media (versus 10
nounced their intention to enter the Russian market.
transactions in 2005), whereas most of them were connected with setting
up insurance groups. As of 1.01.07, the share of foreign capital in the aggregate authorized
Large insurers’ ambition to get rating by the top rating agencies capital of Russian insurers amounted to 4.5%.
including international ones helped to improve transparency However, according to the most conservative estimates, the amount of
of the insurance market leaders and in the insurance sector in
planned and actual investments of foreign insurers is much higher due to
different types of indirect investments for own development purposes, IT
In 2006, insurance companies, in particular, those from among the lead- divisions, opening of offices, creation (acquisition) of agency networks.
ers stepped up their efforts getting ratings of Russian and foreign rating
44 market participants got rating from Expert RA. 18 of them had their
ratings affirmed and 3 got it upgraded. Seven largest insurers got ratings
form international rating agencies at the end of 2006.
State and municipal entities intensified their use of insurance
services, which is connected with the all-level budget allocations
for insurance purposes.
This trend is to be seen not only in the area of compulsory motor TPL insur-
ance, but also in voluntary medical insurance and property insurance. The
number of insurance tenders held by budget-supported organizations of
various levels in all the regions of the Russian Federation increased consider-
ably. Coverage of potential insurants with insurance services is extending.
More foreign insurers entered the Russian market.
More foreign capital.
In the reported period, against the background of Russia’s WTO accession
negotiations, foreign insurers who only had representative offices in Russia
Current Positioning of
Ingosstrakh in the Market
In 2006, Ingosstrakh’s premium for direct insurance and risks assumed for
reinsurance amounted to RUB 34.1 bln, an increase of 20.3% versus 2005.
Premium for inwards insurance for the last year went down 3% and totaled
RUB 3.2 bln.
In the period from 2003, the average growth of direct premium in Ingoss-
trakh was 46%, which is one of the highest rates in the insurance market
and is almost twice as large as the market growth rate in the same period.
In 2006, Ingosstrakh’s business development in the voluntary non-life in-
surance market including compulsory motor TPL insurance outpaced the
market growth rate.
According to the Federal Insurance Supervision Service, insurance pre-
miums in this target segment grew by 20.5%, whereas in Ingosstrakh it
reached 23.8%. Premium for property insurance in this period grew at the
same pace as in the market (growth of 22.8%). This is based on the fact
that the Company selects risks in the segment, in particular, as regards
property insurance of economic agents where the growth rate was 13.3%
versus the previous year.
In 2006, Ingosstrakh retained leading position in terms of direct insurance ers registered in the Russian Federation. Ingosstrakh’s leadership builds on
premium (except compulsory medical insurance transactions) among insur- its high standing in different segments of the insurance market:
Ingosstrakh’s performance in direct insurance in 2006
Types of Insurance 2006, RUB bln Growth vs. 2005 Current market share
1. Voluntary insurance: 27.0 23.8% 7.9%
personal (except life insurance) 34 36 7% 4 4%
property (except liability insurance) 21 1 22 8% 9 2%
liability insurance 25 16 2% 15 0%
2. Compulsory insurance (compulsory motor TPL insurance) 3.9 21.2% 6.0%
Total 30.9 23.4% 7.5%
Ingosstrakh is leading in voluntary insurance other than life insurance in
terms of insurance premium. At this, the Company holds the first place
among all participants of the insurance market in terms of premium
for property insurance and voluntary liability insurance, and in absolute
terms the gap with the closest competitor is rather substantial;
Ingosstrakh traditionally targets property types of insurance; there-
fore the share of personal types of insurance in its portfolio is smaller
than in the structure of the insurance market. Regardless of this, in
voluntary personal insurance, Ingosstrakh was the 4th in terms of in-
surance premium in 2006;
Ingosstrakh’s third place in compulsory motor TPL insurance builds
on deliberate and careful approach of the Company towards this
type of insurance. In some regions of the Russian Federation, the
situation around compulsory motor TPL insurance is critical. Although
the level of compensations is coming close to the “forbidden” 77%,
this is happening mainly to smaller regional insurers, while Ingosstrakh
is able to compensate for high losses in the regions with low territo-
Ingosstrakh’s leadership in voluntary property insurance (including liability
rial ratios with standard loss ratio in the regions with high territorial
insurance) is driven by its strong position in corporate insurance (insurance
ratios, and the Company monitors carefully its loss ratios and main-
tains proper balance of the insurance portfolio.
of property and liability of legal entities), its experience in insurance of In 2006, the main factors of growth in the corporate sector for Ingosstrakh
complex types of risk like aviation and space insurance, hull insurance and were fire and attending risks insurance of legal entities and voluntary medi-
ship-owners’ liability insurance, technical risks insurance. cal insurance covered by employers.
In 2006, insurance of individuals (retail insurance) grew at a priority rate. In 2006, the main factors of growth in the retail sector were auto-hull
In 2006, the share of individuals totaled 43.1% of aggregate insurance insurance and voluntary medical insurance for tourists. Ingosstrakh raised
premium (versus 41.2% in 2005). premiums for property insurance for individuals (except cars) by 1.5 times,
whereas premium collection in the market increased by 15–20%. Thus, the
In 2006, Ingosstrakh’s total premium for insured individuals amounted to
company is quite successful in implementing its plans to intensify its efforts
RUB 13.3 bln.
in the segment of individuals’ property insurance.
Last year, the development of Ingosstrakh’s retail and corporate insurance
was influenced by different factors.
Strategic Goals of
Implementation of Ingosstrakh’s Main Strategic Projects
The strategic goal of the Company has not changed — maximum capi- drafting of life insurance strategy and development of medical
talization and profitability through efficient capital management, retain- insurance, which enabled the Company to clearly identify the areas
ing leadership positions in the market and strengthening competitive ad- of further activities and spur their development and increase their
vantages. To attain this goal, the Company has chosen the differentiated shares in the Company’s insurance portfolio;
development model in four key segments: retail insurance (motor and streamlining of claims settlement system in retail insurance, which
individual property), corporate insurance, healthcare and life. enabled to improve the quality of internal procedures and streamline
the Company’s resources;
In retail types of insurance, the Company’s goal is to become the most
launch of Internet auction for subrogated cars, which enabled to
profitable player in the market. The key factor to achieve this is Ingoss-
increase the Company’s net income by Rub19.8 ml in 2006. The ex-
trakh’s ability to offer best services and prices, in order to expand its client
pected yield of the program in 2007 is Rub31 ml;
base and to maintain high level of client loyalty.
after modeling of targeted sales and management in motor
The Corporate segment provides for increase in the Company’s capital- insurance, we identified about 20 initiatives to help to streamline
ization based on higher profits. The Company will retain its leadership in sales. Main initiatives include informatization of agent and partner
all types of corporate insurance also by diversifying its client portfolio, by networks, setting-up of a traveling group, development and sub-
increasing the share of “medium” client segment and aggressive penetra- sequent implementation of the knowledge base, better quality and
tion of regional markets. Sales will increase as a result of entering new and speed of information provided after monitoring, etc.;
promising market segments, developing a multi-channel sales model and interim results of CRM project will include a material improvement
increasing the number of products per client. of customer service and of handling client applications, automation
of business processes in the Contact Center and retail sales of the
In medical insurance, the Company is looking to become one of the top
Company, forming of a comprehensive understanding of the client.
three by means of efficient control and quality management of services of-
fered by healthcare institutions and through competitive pricing policy.
The main goal in life insurance is to attain a 10% share of the real insurance
market by introducing and actively developing diversified sales models.
Implementation of Ingosstrakh’s Main
In 2006, the Company continued systematic implementation of its long-
term strategic plans:
drafting of the development strategy for retail and corporate
segments prompted the Company to introduce new sales channels
and insurance programs for corporate clients, actively build contacts
with small and medium enterprises and adjust retail business model
to the conditions of the quickly developing motor and individual
property insurance market with regard to introduction of a new pric-
ing model and agent network development;
Performance Results in Core Business
Property and Liability Insurance for Legal Entities. Special Risks Insurance. Cargo Insurance. Insurance of
Aviation and Space Risks. Insurance of Vessels and Ship-Owners’ Liability. Transport Operators’ Insurance.
Credit Risks Insurance. Voluntary Medical Insurance. Motor Insurance. Tourist Insurance. Personal Insurance
(Ingosstrakh-Life). Regional Network. Reinsurance. Marketing. Investment Activities
insurance of property and liability of tenants in large business centers
property and liability Insurance and shopping malls.
for legal entities In 2006, Ingosstrakh continued to develop the policy of active insurance of
risks of agribusiness. Ingosstrakh became a committed participant of Agri-
Property and liability insurance is the most quickly developing segment business Development — the national project of the Government. Among
in Ingosstrakh. For a number of years, it has held the second place in the insurers there were both large agriholdings and smaller companies — per-
Company in terms of insurance charges. In 2006, the share of this seg- sonal subsidiary economies, recipients of government investments within
ment in the Company’s portfolio totaled 20%. Aggregate premium income the framework of national projects and private investments for production
outpaced the market growth rate, increased by 34.7% versus 2005 and development. Here, the Company’s main task was to speed up the devel-
totaled RUB 6.9 bln. The share of inwards reinsurance grew substantially opment of such sectors of agri-industrial insurance as crop insurance, ani-
from RUB 583 ml in 2005 to RUB 1 bln in 2006 (+74%). mal and fish stock insurance, insurance of manufacturers’ property. Thanks
to successful development of operations and expert risk assessment, we
As before, the main areas are still fire insurance, different types of liabil-
managed to increase premium income from RUB 135 ml in 2005 to RUB
ity insurance and technical risks insurance. At this, traditionally small share
308 ml in 2006, which is an increase of 129%, while the rate of loss stayed
belongs to fire insurance — here, premium income totaled RUB 4.2 bln
or 61.4% of total income. The share of technical risks is RUB 2 bln (29.3%
of total income), and of liability insurance — RUB 639 ml (9.3% of total In 2006, the largest insurance compensations for property types of insur-
income). ance were paid for losses caused by total loss of property in fire (5 large
losses of the total amount of RUB 1.1 bln).
Sustainable growth rate was due to the fact that for a number of years the
Company’s main efforts were aimed at: It must be said that regardless of compensations for severe losses, the loss
maintenance and development of mutually beneficial cooperation ratio didn’t go beyond 25%.
with existing clients according to the principle “grow with the client”.
Compensation for severe losses:
Thanks to larger volume and better quality of services provided to
RUB 1.1 bln — first part of compensation (50% of total compensa-
loyal clients, their share in the portfolio totaled 83% or RUB 5.7 bln,
tion amount) to Center of Implementation Protek — fire in the ware-
which is an evidence of high loyalty of Ingosstrakh’s clients;
house for pharmaceutical products;
attracting new clients. In 2006, we signed 15.2th of new contracts for
RUB 23.1 ml — Production Firm Mataplast — fire in the painting
the amount of RUB 1.2 bln.
Activities were stepped up in all client categories. In 2006, high premium RUB 8.5 ml — LVZ Virma — fire in the warehouse for alcoholic bever-
growth took place in the segment of large accounts — growth under con- ages;
tacts with insurance premium of over USD 100th amounted to 40%. At the RUB 8.0 ml — Makhachkala Poultry Plant — loss of poultry stock
same time, volumes increased for small and medium accounts (with con- caused by avian flu;
tract premium of up to USD 100th), too (by 28%). This dynamic increase RUB 6.4 ml — Avtozentr — fire caused by arson;
builds on significant expansion in all core areas: RUB 6.0 ml — Poultry Plant Eldama — loss of poultry stock caused by
insurance of property pledged to banks as loan security; avian flu;
insurance of property for leasing; RUB 5.3 ml — fire in the warehouse for alcoholic beverages;
insurance of property interest of agribusiness and personal subsidiary RUB 5.1 ml — Mobikom Kavkaz — explosion at substation caused by
economy; willful misconduct of a third party.
In 2006, Ingosstrakh remained a monopolist in insurance of cultural valu-
Special Risks Insurance ables and exhibition goods in the Russian market. Premium income in this
segment amounted to over RUB 90 ml, and the loss ratio was almost equal
Special risks insurance is one of the priorities for the Company. Special risks
to zero (0.2%). The growth rate versus the same period in the previous
include cargo insurance, space and aviation risks, insurance of vessels and
year was over 60%.
ship-owners’ liability, insurance of transport operators and trade credits.
Most exhibitions held by Russian museums in other countries were insured
by Ingosstrakh. Large-scale projects include the Year of Russia in China,
Cargo Insurance Masterpieces of the Orsay Museum in the Tretyakov Gallery and exhibition
Russia in Bilbao, Spain. Among the Company’s clients are the State Hermit-
age, the Moscow Kremlin, State Russian and Historical Museums.
In 2006, the Company signed over 25 thousand cargo insurance contracts, In 2006, insurance of valuables transportation was made an independent
by 18% more than in the previous reported period. Insurance premium business line. In the reported period, premium income grew by 111% and
income was RUB 709 ml, reinsurance income amounted to RUB 15 ml. amounted to over RUB 40 ml. Here, large accounts are VTB, Post of Russia,
Cargo insurance market was influenced by the following factors:
progressive increase in volumes of domestic and international inter- In 2006, the Company made efforts not only to attract new large accounts,
modal transportation due to more trade contacts and dynamic de- but also to develop relations with existing large accounts, which yielded
velopment of the Russian economy; higher insurance premiums. The share of large accounts in total premium
improved insurance culture among large and medium-sized busi- income was over 55%. Among new large insurants (annual premium for
ness — understanding the need to get insured, primarily among the each is over USD 100th) are M.Video Trade, Avtologistika — Trans, Post
owners of expensive and highly marketable goods; of Russia, etc.
steady trend towards considerable decline of cargo imported under
Along with retaining existing clients and attracting new ones in the Mos-
cow region, one of the key objectives was to strengthen cooperation with
Sales turnover insurance for Russian participants in foreign economic activi- insurants in the regions of Russia, CIS and other countries. As a result of
ties remains the main type of insurance in this segment for the Company. Ingosstrakh’s efforts, its position in cargo insurance in many regional mar-
We continued to monitor the foreign volume of business of the Russian kets strengthened significantly. The Company’s share grew to 24%, which
Federation in terms of the goods structure, which helped to identify prior- is a 10% growth versus 2005.
ity areas of work with Russian foreign trade enterprises.
As regards payment for severe losses, past year was rather favorable, just
High quality of services and reliable insurance coverage were responsible as 2005. In 2006, 1479 claims were made to the amount of over RUB
for prolongation of contracts with the largest in Russia importers and ex- 190 ml, of them 1327 claims were settled for the amount of RUB 94 ml,
porters of raw sugar, corn, meat, tobacco products, tropic oils, coal and which is 35% less than in 2005. Total loss ratio for cargo insurance was
non-ferrous metals. The same factor prompted many new companies 13% — a record figure for the past several years.
that trade with Western Europe, South-East Asia, Near and Middle East to
The largest settled claims were:
become Ingosstrakh’s clients. At this, insurance of external transportation
RUB 7.4 ml — weight shortage of raw sugar carried by sea from
developed in parallel to insurance of transportation inside Russia, and we
Brazil to Russia;
attracted new large accounts — car dealers and forwarding companies.
RUB 5.5 ml — non-delivery (theft) of a vehicle with cosmetic prod-
ucts on the route Italy — Latvia;
RUB 4.8 ml — total loss of cargo (passenger cars) in fire during trans- duced at least by 15–20%, and for some types (in particular, for ferry
portation; flights) even more.
RUB 3.9 ml — theft of a vehicle with household appliances and elec-
Although the Russian aviation insurance market is very limited, there are
quite many insurers (currently, over 35 companies). Most of them act as
RUB 3.5 ml — theft of container with cigarettes from the load plat-
brokers or fronting companies and transfer all profit for reinsurance, mainly
form at a railway station.
abroad. Still, many aviation insurers in Russia use reinsurance capacity of
In 2007, The Company will continue the implementation of 60 large-scale Ingosstrakh as its reinsurance terms are more favorable.
promising projects that will ensure an increase in premium income and
In this situation, Ingosstrakh has not only preserved and developed tradi-
help to preserve Ingosstrakh’s leadership in the Russian cargo insurance
tional partner relations with larger airlines (S7, Transaero, Krasair), but also
increased the share of large accounts in its portfolio — it insured the fleet
of VIMavia and KD Avia. This allowed to compensate for lower premium
income caused by decline in rates and smaller volume of transactions in
Insurance of Aviation other segments.
and Space Risks The Company continued its foreign operations, both in the CIS countries
and far abroad. Ingosstrakh accepts for insurance aviations risks from the
Aviation and space insurance transactions are still holding an important markets of Ukraine, Byelorussia, Kazakhstan and Kirgizia, also through rep-
place in Ingosstrakh’s portfolio of property and liability insurance for legal resentations, affiliates in the above states and international brokers. The
entities. Traditionally, the Company has been one of the largest operators main markets in CIS are Ukraine and Kazakhstan.
in aviation and space segments of the insurance market, both as a direct
In 2006, premium income from aviation insurance amounted to over RUB
insurer and as a reinsurer.
1.7 bln, of them RUB 1.3 bln was direct insurance.
In 2006, the air transport insurance market demonstrated the following
2006 wasn’t really a successful year as severe losses were claimed. Total
paid losses amounted to over RUB 700 ml, including RUB 584 ml in di-
lower number of airlines in the market caused by more rigid safety
rect insurance. The most severe losses were aircraft А-310 — 435 (Irkutsk),
requirements of the public authorities;
TU-154 (Donezk and Iran/Afghanistan), Boeing 737 (Nigeria).
higher concentration of the national air transportation market. A
group of leaders was formed in the market that included such com- Being a part of the world market, the Russian space risks insurance market
panies as Aeroflot, S 7, Air Union, Transaero and some others that followed the world trends, primarily to continue to reduce insurance pre-
control over 70% of the market; mium rates for accepted risks.
prevailing need to modernize the fleet, primarily by means of leasing
In 2006, Ingosstrakh actively participated in insurance and reinsurance of
second-hand aircraft by foreign manufacturers. High prices and very
over 40 space projects including liability insurance of European commercial
limited number of aircraft types manufactured by Russian aviation
enterprises, which is a good level of operations development taken a very
plants caused shrinkage of potential sales market for local aviation
tough competition. In 2006, we implemented another large project for
and repair bases that are also active in the aviation insurance mar-
Federal State Unitary Enterprise “Space Communications” — insurance of
orbital group of communication satellites of the new generation “Express
lower tariff rates caused by limited solvent demand for aviation insur-
AM”. Total insurance premium under the project was about RUB 250 ml.
ance, as well as by the world trends in the aviation insurance market.
According to the estimates, in 2006, the rates for different risks re-
In 2006, total premium of the Company for space risks insurance was RUB RUB 24, 6 ml — breakdown of the main propulsion unit, “Inzenieris
293 ml, including RUB 273 ml for direct insurance. Neciporenko”;
RUB 20.4 ml — flooding of machine space, “Forest Enterprise”;
At the same time, in 2006, some insurance compensations were paid. Total
RUB 17.1 ml — breakdown of the main propulsion unit, “Merchant
compensation for space risks was about RUB 204 ml, including over RUB
118 ml for direct insurance.
RUB 15.3 ml — stranding, “Altair Dilek”.
The largest settled claim was RUB 114 ml — insurance of loss of income, Among severe losses under ship-owners’ liability insurance settled in
total loss of communication satellite Express АМ11. 2006 there were:
RUB 15.3 ml — total loss of vessel (“Blue Ocean”) off the Japanese
Insurance of Vessels and Ship- RUB 13.4 ml — collision of “Vasya Korobko” with motorship Liva.
transport operators’ Insurance
In 2006, Ingosstrakh remained a leader in the Russian market of insurance
of vessels and ship-owners’ liability. At the same time, the competition in In 2006, in the area of transport operators’ insurance, the Company con-
this sector intensified last year. In this environment, the Company chose to tinued its positive development and reached a 23% growth as compared
“clean up” its portfolio and attract high-quality young fleet. As a result, ac- to the previous period and received premium income of RUB 550.8 ml.
crued premium for hull insurance stayed on the level of 2005, which is RUB
The dynamic development of the segment built on:
887.5 ml, and decreased for liability insurance by 2.5% and totaled RUB
partial liberalization of cargo transportation by the Russian railways;
693.6 ml. This minor reduction of liability insurance premium was caused
speedy renewal of the fleet of cars, locomotives and track equipment
by the general stagnation in the liability market because:
due to increased demand.
of the dоminant role of foreign insurers in working with large steam-
ship companies — premiums go to the foreign market; 2006 was very successful both in terms of retaining old clients and attract-
of foreign origin of vessels of potential insurants; ing new ones, among them the leading carriers and train operators, like
often, hull insurance is preferred to ship-owners’ liability insurance; RZD (Russian Railroads), Firm Transgarant, ZAO Evraztrans, Metalloinvest-
of general lack of liability insurance risk in insurance of small-sized ves- trans, Russkaya Troika, etc.
In our traditional segment TIR, the client portfolio has not changed — our
In 2006, hull insurance market was characterized by a larger number of ves- clients are 10 Associations of International Motor Carriers from Russia, Lat-
sels under construction in Russian shipyards, inflation component in insur- via, Lithuania, Armenia, Azerbaijan, Georgia, Kazakhstan, Kirghizia, Moldova
ance sums and slow non-systematic increase in the number of insured ves- and Uzbekistan. Higher premium income in 2006 for this type of insurance
sels. Under such conditions, we insured large vessels under construction as can be explained with a larger number of TIR Carnets received by the As-
platform MOSS CS 50 II, a food carrier, a seismic prospecting vessel. sociations, which in its turn is related to the increase in export-import and
transit operations via the territory of Russia, the Baltic States and the CIS
Altogether, the loss ratio in this segment was below the forecast and to-
taled 60%. Severe losses in hull insurance (reinsurance) settled in 2006
include: Larger volume of business between Russia and its foreign partners and
RUB 173.2 ml — fire on the destroyer under construction; penetration in the domestic market of large foreign companies formed de-
mand for new insurance products. With regards to our clients’ needs, we
introduced changes to the current Rules of Liability Insurance for Carrier/ In the reported year, following the development of the insurance portfo-
Forwarding Agent, Operator of Transport/Customs Terminal, Customs Car- lio, reinsurance protection for credit insurance developed further: debtors’
rier in order to offer comprehensive insurance to our clients on all stages limits were raised and the number of international reinsures increased. All
of cargo delivery. Such changes resulted in insurance of such new logistic reinsures have international financial strength ratings of A range.
companies as Logistic Service “Siyanie”, MC Logistic, IKEA Mos (Trade and
The Company closely cooperated with Austrian Insurance Company Garant
and its Swiss affiliate, Belgian Insurance Group ONDD — Ducruar, Italian
Moreover, starting with 2006, Ingosstrakh introduced a new insurance Insurance Group Sacce and some other credit insurance and reinsurance
product — liability insurance for persons who give guarantees (surety) of partners.
customs charges payment. Potential consumers of such insurance services
are banks, customs carriers, limited storage sites/customs warehouses, etc.
Voluntary Medical Insurance
Credit Risks Insurance In 2006, the same way as in 2005, the voluntary medical insurance mar-
ket was characterized by tough competition, prevalence of legal entities
As a pioneer of credit insurance in Russia, Ingosstrakh is strengthening its among insurants and regional business development.
leadership position in this type of insurance and offers high-quality insur-
In 2006, the market development was influence by the following factors:
ance of accounts receivable.
more complicated situation in budget-supported healthcare system;
In the reported year, the insured volume of business exceeded RUB 100 bln. higher income of corporations and private persons — potential cli-
Premium income for insurance of trade credits increased compared with ents;
2005 and amounted to RUB 333.2 ml. increased demand of employers’ to include medical insurance in
compensation package for employees;
The main growth factor was demand for trade credits insurance from large
higher insurance tariffs for voluntary medical insurance. Tariffs were
multinational corporations that supply their product to Russia and CIS.
influenced by inflation expectations as regards cost of services in
Most requests were in the area of electronics and home appliances. The
healthcare institutions. The annual tariff growth is 10-15% and will
sustainable growth of sales in the sector, continued concentration of play-
remain on the same level in the next few years;
ers and limited opportunities of European insurers promoted high demand
increased volume of one-time medical services sold through “mo-
for the services of reliable Russian companies. In 2006, the major growth
nopolicies” regardless of rather “strict” position of regulatory authori-
was driven by clients from South Korea, Italy, Turkey, the USA, Austria and
ties concerning this type of business (no serious sanctions have been
enforced for “monopolicies” against market participants so far).
A large volume of credit insurance operations persisted in pharmaceutical
In 2006, the Company significantly increased income in this segment —
distribution, foodstuffs, construction and finishing materials and packaging.
the growth rate was 40.7% versus the previous year, and total premium
Advance payments were insured for export of metal and mineral fertil-
exceeded RUB 2.5 bln. Ingosstrakh’s compensations amounted to RUB
2.0 bln. (+28.1%).
About 80% of portfolio was short-term insurance of business volume. Mid-
Based on its performance in 2006, the Company holds the 3rd place in the
term insurance covered risks of non-payment for equipment supplies for
market with the share of 4.8%, which is 0.7 percentage points more than
food and processing industry. This trend will prevail under conditions of
in the previous year.
continued re-equipment of the Russian industry.
Ingosstrakh’s voluntary medical insurance portfolio is distinguished by prev- Altogether in 2006, 164 thousand contracts of voluntary motor insurance
alence of large corporate clients (premium from USD 100th per annum were signed with Ingosstrakh — an increase of 48% versus the previous
and more). For the last few years, the share of such accounts increased year. The Company signed 1256 thousand contracts of compulsory motor
from 60% to 75%. liability insurance. In 2006, in this segment, settled claims exceeded 68.5
In 2006, the Company attracted the largest producers from food, con-
struction and other sectors, such as Danone Industry, Baltika Brewery, Mc- In 2006, in Moscow the base tariff system has not changed, however dur-
Donalds, AMD Programme, Gallery Service, Glavmosstroymonolit, Ermann, ing the year there were changes in tariffs for damage to certain car brands
etc. and models depending on changes in repair cost of official dealers.
In 2006, along with programmes for corporate clients, Ingosstrakh devel- Besides, there were changes in tariffs for auto theft for certain car brands
oped “box” package of current retail programmes, programme based on and models based on quarterly monitoring of car thefts and correspond-
outpatient clinics “Value for Money”, as well as outlined new products for ing loss ratio. In 2006, Ingosstrakh’s branches launched the same tariff sys-
individuals with franchise, waiting periods, multi-year insurance, etc. in or- tem as in Moscow adjusted for regional correction factors for “Damage”
der to provide a 100% satisfaction to our clients. and “Auto Theft”.
In compliance with the current development strategy, the following chang-
es were made in the product sales channels:
Motor Insurance restructuring of sales of private property in order to increase the
market share — spin off of property underwriting;
Currently, motor insurance is a locomotive of the whole Russian insurance
restructuring of direct sales in order to increase the share of direct
sales in the portfolio — direct sales were restructured according to
2006 was a milestone year for the automobile market: sales of brand- specialization, pilot project “mobile group” was implemented;
new foreign cars exceed a million and surpassed sales of domestic cars. accelerated promotion of the product for target segment “second-
Aggregate insurance premium for MOD insurance was about RUB 90 bln, hand” foreign cars which ensured premium income for “Optimal” in
and in the last two years the market has been growing at an average rate the rate of RUB 260 ml.
of 60% per annum. It must be noted that the market development was
The largest compensations for motor insurance in 2006 were mainly relat-
driven mainly by the growing car fleet but not higher average policy price.
ed to thefts of premium-class cars: 3 Porsches CAYENNE and a Mercedes-
However regardless of high growth rate of sales and car insurance, the
Benz S with the average compensation of RUB 4 ml and a car accident with
market grew mainly due to the low price segment (cars from USD 10 to
the total destruction of BMW M 5 — RUB 4.5 ml.
20th). This segment is most sensitive to price changes, and the competition
here is very rigorous, even with dumping. Under such conditions Ingoss-
trakh decided to strengthen further its position in upper price segments of
the automobile market, which will help to prevent higher losses if growth tourist Insurance
In 2006, the tourist insurance market continued to develop as in 2005. At
Total premium income for motor insurance exceeded RUB 16.4 bln, of the same time, increased number of insurants was leveled by dumping
them RUB 12.6 bln (+32.5%), compulsory motor TPL insurance — RUB and rigid competition among insurers for large travel agents. This resulted
3.9 bln (+21.1%). in annual premium reduction by 5-10%, and for some travel agents — by
20%. As a result, the average market growth was not more than 7% in
It must be noted that in 2006 there was a change in favorite destinations.
Now, Russian tourists often prefer to spend their vacations in Spain, Croatia, personal Insurance
Montenegro and Greece. Still, traditional leaders — Turkey and Egypt —
preserved their leading position, but the gap is getting narrower.
In 2006, the Company’s premium income was RUB 346.6 ml, which ex- After coming into effect on July 1, 2007 of the requirement of the Fed-
ceeds the previous year by 4%. eral Law on Insurance Business in the Russian Federation to divide life and
property insurance in one company, there emerged subsidiaries of insur-
Higher premium income in 2006 was not the result of an increased number
ance companies that offer life insurance.
of insurants but because higher limits of insurers’ liability were introduced
for insurance contracts and higher tariffs for entry to European countries, As a result, this business line was turned into independent insurance com-
including the Schengen States. Restraint of premium income by price pany Ingosstrakh-Life.
dumping and parallel increase in the number of insurants caused higher
Life insurance market development in 2006 was influenced by the Fed-
costs of portfolio maintenance and reduced efficiency of insurance trans-
eral Insurance Supervision Service that implemented a tough policy against
actions. However, the Company managed to preserve its leadership, which
“pre-arranged transactions” in the market. As a result, life insurance market
is about 40% of the market.
reduced by 37% as compared to 2005.
In 2006, the Company had to step up its activities to retain large travel
Unlike other market players, Ingosstrakh has always abided by the policy of
agents who guide the market in terms of destinations, such as Natali Tours,
“white business”. In 2006, Ingosstrakh-Life got RUB 473.7 ml of premium,
Lanta-Tour, Mostravel, Biblio-Globus, Roza Vetrov, Solveks, Capital Tour,
which is 22% more than in 2005. Premium in the main segment — life insur-
and others. At the same time, over 150 middle-sized travel agents, several
ance — grew by 116% (+RUB 59.7 ml), in accident and health insurance —
corporate clients that get their employees insured for business trips out-
by 8% (+RUB 27.1 ml). This resulted in an increase of the Company’s share
side Russia became the Company’s clients.
in life insurance from 0.2% to 0.7%. Currently, the Company’s share in the
Last year, a milestone in development of this segment was the launch or life insurance market is not big, but its growth rate is much higher than in
retail sales of non-departure insurance, which enables to offer a larger the market. Pursuant to the adopted development strategy, the share will
range of insurance services not only in course of the trip, but also on the grow to 10% by 2010. The leaders in the life insurance market (in terms
preparatory stage. of premium income) are either captive insurers (Capital Insurance, SOGAZ-
Life, Neftepolis) or insurers affiliated with banks (Russian Standard Insur-
In 2006, we managed to keep the loss ratio of tourist portfolio at 43%,
ance). There is only one market insurer among top five– AIG Russia.
which is a proof of stable and efficient claims settlement.
In 2006, Ingosstrakh — Life signed contracts with major companies, like
The largest settled losses were under insurance of emergency medical
Ernst&Young (consulting services), Xerox (manufacturer of office equip-
costs when traveling abroad. Among them, in 36 cases the amount ex-
ceeded RUB 260 thousand each.
ment) and Dupont (scientific and industrial corporation). Total number of improve the quality of management of branches located in East Siberia,
persons insured in 2006 was 650 thousand. we closed down the Baikal Regional Center, and the relevant branches are
now managed by the Siberia Regional Center.
In 2006, the main goal of the product policy was to adjust the product
line for their proper positioning in the market with regards to changing cli- In 2006, we opened 23 additional offices of the Company’s branches.
ent requirements. The Pension Programme was made subject to the rules
Insurance premium income in regional divisions of the Company totaled
of Pension Life Insurance, which seriously simplified purchase of pension
RUB 7.8 bln, which is 39.4% more than in 2005.
programs by individuals and made it more beneficial. A special calculator
was developed to calculate pension payments. Also in 2006, a credit insur- The main share of the insurance portfolio of the branch network belongs
ance programme for individuals was developed, which is a much-needed to motor insurance — RUB 4.9 bln (the share in the regional insurance
product in the situation of growing consumer and mortgage lending in portfolio is 62.2%). The share of compulsory motor TPL insurance in total
the country. motor insurance was 39.2%. Premium income for property and liability
insurance amounted to RUB 1.0 bln (13.1% in the portfolio), for voluntary
According to the competition analysis of the life insurance market that
medical insurance — RUB 758 ml (9.7%). Other types of insurance ac-
was held in the fourth quarter 2006, accident insurance programmes of
count for less than 10% of the portfolio. This includes space and aviation
Ingosstrakh — Life are among the most flexible and comprehensive in-
risks — 6.0%, insurance of vessels and ship-owners’ liability — 4.3% and
surance products in the Russian market. Current long-term life insurance
other types — less than 3%.
programmes can answer the market needs.
The share of branch network in the total premium income of the Company
In 2006, the Company’s compensations totaled RUB 108.9 ml, including
in 2006 was 22.9%, which is 3.2% more than in 2005. At this, the share of
several settled claims with compensation of over RUB 1 ml each. The larg-
branches in total charges has not changed materially in 2006, except for
est part of compensations was paid under group insurance contracts.
insurance of space and aviation risks (23.8% versus 12.7%). In motor insur-
ance, the branches’ share increased from 24.8% to 27.7%.
Regional network An increase in the volume of premium income in 2006 as compared with
2005 amounted to 45.9% for motor insurance, 35.2% for property and
In 2006, the branch network of Ingosstrakh consisted of 9 regional centers, liability insurance, 40.9% for voluntary medical insurance. The maximum
87 branches and 148 additional offices. Ingosstrakh’s divisions are func- growth in relative terms was in insurance of space and aviation risks —
tioning in all constituent entities of the Russian Federation and are open in 53.5%, and in absolute terms — in motor insurance — by RUB 1.5 bln.
235 cities and urban centers.
In 2006, we closed down the Southern Regional Center (Rostov-on-Don)
and simultaneously opened the “South” Regional Center (Krasnodar). To
Portfolio protection is the priority for Ingosstrakh. Protection operations In 2006, the Company abided by the key principles of its marketing strat-
can be divided into two main components: marine and aviation reinsur- egy approved by the Board of Directors of the Company in 2005. In 2006,
ance and non-marine reinsurance programmes. Key parameters of Ingoss- main marketing events were targeted at retail consumers of insurance ser-
trakh’s reinsurance contracts in 2006 are given in the table below. vices. In the previous year, five segments of consumers were identified;
three of them were declared target segments for Ingosstrakh in terms of
In 2006, because of new more stringent requirements of the European
the product line and communication policy. At the same time, significant
Union to European flights, carriers need higher liability limits. Therefore, In-
marketing efforts were aimed at promoting priority types of insurance for
gosstrakh acquired additional protection for such risks. Also in 2006, we ex-
corporate business. Another equally important marketing aspect was im-
panded aviation risks reinsurance portfolio by entering into new contracts
provement of marketing communications in the regions of the Company’s
for military risks. A new leader emerged in catastrophic contract for MOD
presence in 2006.
insurance (Converium instead of Platinum), as the new leader in MOD in-
surance offered more attractive terms, both of pricing and coverage.
Basic Contract Parameters of Outwards Reinsurance of Ingosstrakh in 2006
Programme Details Features
Marine and Hull reinsurance Excess of loss, priority USD 1 5 ml, limit USD 30 ml
Cargo reinsurance Excess of loss, priority USD 2 5 ml, limit USD 30 ml
Ship-owners’ liability reinsurance Excess of loss, priority $3 ml, limit $500 ml
Aviation liability risks reinsurance Excess of loss, priority $3 ml, limit $75 ml
Aviation liability to third parties of over USD 75 ml Excess of loss, priority $75 ml, limit $675 ml
Aviation liability to third parties of over USD 50
Excess of loss, priority $50 ml, limit $500 ml
ml, “military risks”
Quota share reinsurance USD 18 ml and 20% net retention (for
Aviation hull risks reinsurance
some risks — USD40 ml and 10%)
Non-marine risks Reinsurance of property risks Excess of loss, priority USD 1 ml, limit USD 150 ml
Reinsurance of technical risks Excess of loss, priority USD 2 5 ml, limit USD 50 ml
Reinsurance of civil liability risks Excess of loss, priority USD 0 75 ml, limit USD 5 ml
As regards marketing communications, the main focus was on their integra- Also in 2006, we developed and implemented a communication pro-
tion on the basis of the Guidelines on the Corporate Style of the Company gramme to stimulate consumer demand in the sales channel for retail types
as approved by the Management Board of Ingosstrakh in 2006. The new of insurance that envisages promotion of insurance services using POS and
corporate style was launched in the Company’s sales offices, in advertising other advertising and information materials, as well as events to enhance
and information materials, for design of the corporate website, souvenir the number of requests to the Company Contact Center.
products and other advertising and information vehicles.
To enhance competitive ability of the Company’s products based on mar-
Last year, we developed the plan of marketing events and implemented keting research held in 2006 using different methods (focus group, con-
the integrated communication programmes to promote corporate and re- joint-analysis, etc.), we analyzed the existing product lines and identified
tail types of insurance, such as: proposals to create new or modify existing products in motor insurance,
insurance of property of natural and legal persons; property insurance and voluntary medical insurance.
retail and corporate motor insurance;
We continued evaluation of the Company’s activities in general. Last year,
voluntary medical insurance and travel insurance;
we developed the evaluation methods and assessed such key performance
indicators as attracting and retaining clients, satisfaction of insurants, aver-
aviation and space risks insurance;
age number of business lines per customer. Besides, in 2006 we developed
insurance of vessels and ship-owners’ liability (in particular, insurance
and introduced the procedure of organizing regional integrated advertis-
of yachts and boats);
ing campaigns and their assessment.
insurance of transport operators.
Examples of Successful Protection
Ptotek May 14, 2006, there was a large fire on the territory of the warehouse owned by Protek Final loss compensated to
the client was USD 75 ml This is the largest loss in the history of the Russian property reinsurance The amount of
loss exceeded Ingosstrakh’s net retention (USD 1 ml); it was collected from reinsurers under the obligatory property
Azovstal In 2006, another large loss was claimed Blast furnace #3 exploded in the plant of Azovstal on March 23, 2006
Currently, Ingosstrakh’s reserve for this type of insurance is USD 12 7 ml Net retention was USD 1 ml
Severnaya Verf April 27, 2005, there was a fire on the destroyer ship under construction at OAO Severnaya Verf (Northern
Shipyard) Ingosstrakh’s loss was USD 6 578 500 and was paid to the client on November 10, 2006 Under the
obligatory treaty, reinsurers covered the amount of loss in excess of Ingosstrakh’s net retention
Research Company, throughout 2006 Ingosstrakh was among top three
in the market according to this indicator and the brand knowledge was
growing at a stable rate.
Ingosstrakh is the only insurance company in the rating of most valuable
Russian brands compiled by Interbrand Group, the international consulting
Ingosstrakh’s investment policy is aimed at building the best investment
portfolio and proper management thereof based on full compliance with
the existing legal norms and requirements and with regards to the Compa-
In the light of the forthcoming 60th anniversary and increased visibility of
ny’s strategic objective to improve its financial stability and capitalization.
the Company in the Internet, Ingosstrakh developed and launched a new
website (www.ingos.ru) that differs significantly from the previous version. Short-term investments fund is being formed on the basis of conservative
It is aimed at all the categories of users: retail consumers, corporate clients approach aimed at risk minimization, which ensures reliability and return
and partners of the company. At this, the structure and navigation of the on investments at the planned rate of return. The main task of short-term
website cover all segments of insurants: those with some insurance experi- investments is to fulfill obligations and earn investment income. The source
ence and wanting to choose a tailor-made programme and those who are of short-term investments is insurance reserves and equity of the Com-
just starting to use insurance services. The website offers quick and easy pany.
access to calculators of insurance premium for different types of insurance
(motor insurance, property insurance and travel insurance) in order to start
the bank instruments portfolio grew by 63 %, from RUB 11.9 bln to
Internet-based sales of insurance products.
RUB 19.4 bln;
Marketing efficiency is confirmed by the sustainable knowledge of Ingoss- because of high volatility of the Russian Stock Exchange in 2006, profit
trakh’s brand (no prompting). For instance, according to the ComCon for portfolio of non-bank financial instruments was partly fixed and
some assets were converted into low-risk bank instruments, which re-
sulted in a reduction of the non-bank financial instruments portfolio
Insurance Brand 1st wave 2nd wave 3rd wave by 14 % from RUB 4.9 bln to RUB 4.2 bln;
in 2006, yield of the non-bank financial instruments portfolio totaled
21.8 % per annum or RUB 1.2 bln in absolute terms;
Rosgosstrakh 42.3 41.9 44.3 yield of the bank financial instruments portfolio totaled 8.2 % per an-
num or RUB 1.1 bln in absolute terms;
Ingosstrakh 33.4 34.9 37.0 total yield of transactions with short-term investment portfolio of the
Company in 2006 amounted to RUB 2.3 bln.
Rosno 34.0 32.0 32.8
Spasskie Vorota 26.8 27.5 27.9
Alfa Strakhovanie 24.5 25.1 25.6
As of 31.12.2006, there were 1664 employees in the head office in Mos- Personnel’s training is based on special programmes of the Corporate Uni-
cow and 2151 in the regional network. 64% of employees are up to 35 versity. The training is aimed at improving the competency of employees in
years of age. About 78% of employees have higher education. order to promote implementation of the Company’s strategic goals.
Key areas of HR policy of the Company are the following elements of the In 2006, about 2500 persons took part in trainings (over 60% of the Com-
personnel management system: pany’s employees). Education programmes make wide use of distant learn-
planning personnel resources and recruitment; ing including training programmes in special subjects with regard to the
professional training; needs of the regions.
improved system of motivation;
In November 2006, we held the annual Performance Evaluation of Person-
monitoring of personnel;
nel that covered about 90 % of all the employees. As a result, we formed
development of corporate culture.
a personnel reserve of the Company and developed the annual plan of
Throughout its history, the Company has been developing certain princi- professional education for the employees.
ples of corporate culture that must be strictly followed by all employees. In
In 2006, new Training Procedures for Insurance Agents of Ingosstrakh were
2006, the management terminated contracts with 24 employees (including
introduced. According to the Procedures, a special methodology will be ap-
in regional branches) for non-compliance with such principles.
plied to select candidates to learning groups, a programme of adaptation
In October 2006, the Board of Directors of the Company adopted the and traineeship. The training programme for insurance agents acquired a
Code of Ethics of Open Joint-Stock Insurance Company Ingosstrakh. One wider format in 2006 — we introduced a course in voluntary medical insur-
of its main objectives is to strengthen loyalty to the Company as the high- ance programmes. Insurance agents are trained by local experts in motor
est standard of ethical behavior. The Code sets forth the main principles of insurance and medical insurance.
relations between employees, business partners, clients, and the principles
In December 2006, we held the 9th Contest of Ingosstrakh for the best
of fair business.
student work on insurance. Students from the universities of Moscow and
In 2006, we recruited specialists in different areas. The requirements includ- regions took part in the contest: mechanical and mathematical faculty of
ed basic professional knowledge, previous experience, and knowledge of the Moscow State University, the Financial Academy, UGTU-UPI, KemGU,
foreign languages, ambitious personality, performance-oriented attitude, the Moscow University of Humanities, VGIK and others. The winners were
and desire to grow and improve one’s professional level. awarded grants and bonuses to the amount of RUB 195 thousand.
Insurance Risks. Financial Risks. Credit Risks.
To ensure financial sustainability and efficiency, Ingosstrakh has introduced and control over compliance with limit and tariff compliance on the
a risk management system based on an integrated top-to-bottom ap- part of the Company’s divisions and employees;
proach to risk identification, recognition, measurement and management Internal Audit Administration, which is entrusted with the function to
across the Company. monitor operational risks;
Engineering Center is responsible for pre-insurance due diligence of
The Risk Management System (‘RMS’) is based on the following principles:
complex objects. The Center is authorized to adjust insurance tariffs,
monitored decision making process;
to incorporate in the insurance contracts special provisions and to
accurate, reliable, timely reporting;
participate in the settlement of insurance claims correspondingly.
independent control. To avoid conflict of interests, the control over
Information Analysis and Protection Department ensures protection
the division assuming the risk is delegated to an independent entity.
of Ingosstrakh’s interests through identification and suppression of
information transparency. The principle of information transparency is
corrupt practices through clearance of employees, clients, partners,
entirely integrated in the risk management and risk control process.
financial and crediting organizations.
The Company’s RMS is guided by in-house norms and standards. The risk
The results delivered through risk analysis exercises are especially important
management function lies entirely with the Company’s management and
in the context of developing a general risk management strategy. They are
the following divisions and committees:
taken into account in full during respective decision making processes by the
The Audit Committee under the Board of Directors. This Committee
Company’s management. The Company classifies four major risk categories:
is a consultative and advisory body which reviews issues of internal
control, inclusive of financial and operational control, along with is-
Insurance Financial Risks Credit Risks Operational
sues of risk management. The Committee analyses internal control Risks Risks
systems and elaborates improvement recommendations.
The Insurance Committee, a collegial body which decides on the fea-
sibility of major insurance contracts, provides net retention limits on Underwriting Forex Investments Processes
insurance transactions, approves the structure and features of re- Changes
insurance coverage of Ingosstrakh’s insurance portfolio, determines
Pricing Liquidity Reinsurance IT Risks
the functions and powers of Ingosstrakh’s divisions as to the scope of
insurance activities, determines the limits as per insurance contracts Reserves Market risk Third Parties Personnel
underestima- (market value
and payouts of insurance coverage and delivers decisions regarding tion changes)
settlements above the approved limits.
Financial and Investment Committee is a collegial body responsible Major, Cu-
for identification of limits for all of the Company’s investment both in catastrophe
terms of issuers and separate instruments; risks
Insurance Evaluation and Control Administration. Its functions encom-
pass the evaluation of insured risks, control of the risks undertaken for
insurance coverage by operating and regional units and control of The overall Risk Management Scheme in the Company is based on the tra-
relevance of insurance indemnity payments; development of recom- ditional system of multi-level limiting and monitoring of limit compliance at
mendations for the Insurance Committee as to the authority to sign all management levels. The limits are undertaken on the basis of posteriori
insurance contracts, payment of insurance indemnity, decision mak- mathematical modeling and many years of practical experience of best
ing limits for Ingosstrakh insurers in the process of insurance activities, insures for each major group of risks. The limits are subject to identifica-
development and implementation of insurance risk mitigation actions tion by independent bodies (committees) whose activities are continuously
monitored by the Company management.
the amounts of reinsurance are subject to review and approval by the
Insurance Risks Insurance Committee.
The management of the Underwriting Risk in Ingosstrakh is based on a
predetermined strategy through meticulous selection of insurable/reinsur-
able risks. The Company lays down special insurance norms, rules and limits Financial Risks
of insurance coverage, and each operating division has the right to deliver
Financial Risks are managed with the help of the tools and methods laid
decisions regarding the acquisition and liquidation of losses at its own dis-
down in the Company’s investment policy. The latter is primarily targeted
cretion provided that it acts within the ambit of the foregoing norms, rules
at compliance with legal requirements regarding principles of diversifica-
and limits. The loss acquisition and liquidation functions are split between
tion, profitability and liquidity to be observed in the placement of insur-
the coordinators of losses and the coordinators of insurance policies. This
ance reserves. The foreign exchange risk is controlled through the diversifi-
division eliminates the possibility of losses for the company because of a
cation of the investment portfolio by type of currency. The purpose of this
more loyal indemnification of losses for retention of its own clients if an
exercise is to provide compliance with the open foreign currency position
insurance claim is coordinated by one coordinator in charge only. The con-
limit in the future depending on the forecast value of balance sheet items
trol of compliance with the limits and the review of risk acquisitions and risk
and cash flows by currencies. The limits per the relation of the open for-
indemnification cases whose size is above the level set down by the limit
eign currency position in major currencies (rubles, US dollars and Euro) to
for the division, is the responsibility of dedicated bodies, namely the Insur-
the size of equity capital and sight liabilities (the difference between the
ance Committee and the Insurance Control and Evaluation Administration.
insurance reserve valuation according to the Russian standards and their
The Pricing Risk may emerge in the event of inadequate assessment of actuarial evaluation) are determined by the Financial and Investment Com-
risks used for the calculation of insurance tariffs. The development of the mittee. The compliance with the open currency position requirements is
Company’s tariff system in general is the responsibility of the actuarial divi- controlled by the Chief Financial Officer on a monthly basis.
sion entrusted with the function to calculate specific tariffs for insurance
The Liquidity Risk is managed through managing the investment portfolio
products offered to retail and corporate clients on the basis of the ac-
to time the investment placements in such a manner as to ensure that the
tuarial model. The rationale regarding the feasibility of tariff approvals is
liabilities are secured by current assets. Cash flow forecasts are also taken
determined in conjunction with the interested operational divisions and is
into account. The compliance with the liquidity norms is controlled by the
subject to further approval by the Company’s management, its Insurance
CFO on a quarterly basis. Cash flows are reported to the CFO every month
Committee and the Insurance Control and Evaluation Administration.
while the Treasury provides for weekly cash flow monitoring.
The Risk of Insufficient Reservation is placed under continuous control
To manage the market risk, the Company uses a two-level system of limits:
through analysis of reservation sufficiency, including run-off analysis. Ad-
it has determined a list of types of assets acceptable for reserve coverage,
ditionally, the comparison against actuarial evaluations is used as the basis
and there are limits laid down for investments into each type of assets and
for evaluation of adequacy of insurance reserve calculation methods set
into one specific asset (securities by one issuer, real estate objects etc).
down in applicable legislation. The findings of such analysis are used to
There are also Stop-loss limits and Take-profit limits. The limits are deter-
optimize the methods of actuarial evaluation of insurance reserves and to
mined by the Financial and Investment Committee. The limit summary size
develop proposals for the RF Ministry of Finance in order to improve insur-
of the investment and trade sub-portfolios as well as the array of instru-
ance reserve calculation rules in compliance with the Russian accounting
ments comprising securities sub-portfolios are also subject to approval by
the decisions of the Financial and Investment Committee. The compliance
The management of major, cumulative and catastrophe risks in the Com- with the limits is monitored on a daily basis by the CFO and the General
pany is done through reinsurance. The limits for retainable amounts and Director.
The responsibility for control of compliance with the limits is placed with
Credit Risks heads of structural divisions.
The major source of credit risks for the Company is investments into debt From 2006, the Company started creating the pool of credit histories of
securities (non-bank financial instruments) and RUB/Forex bank deposits individual insurants (in the context of their contacts with Ingosstrakh). This
and promissory notes (bank financial instruments). In the base investment information will be used as the basis for clearance of potential clients to
portfolio option the percentage of investments in bank and non-bank fi- sign contracts / afford payment by installment.
nancial instruments are limited by 30% and 70% thresholds correspond-
ingly. The investments are allowed only in the instruments listed in Order
No 100 of the RF Ministy of Finance dtd. August 30, 2005. Within the
foregoing limits, the Company employs a two-level system of limits: limits
per each type of assets and per one specific asset. As to bank financial in- Processes
struments, there are limits per groups of banks. The limits are determined
In 2006, the Company updated its system of delimitation of areas of re-
by a special collegial body, the Financial and Investment Committee, and
sponsibility through explicit distribution of job functions top to bottom in
are monitored weekly by the CFO.
the organization to avoid duplication of functions and to fast-track deci-
The Reinsurance Risk is determined by the quality of the coverage providers. sion-making processes. There were also introduced new regulations on
Ingosstrakh selects the reinsurers on the grounds of explicit criteria which delegation of authority, pursuant to which there were determined limits of
encompass limitations of the rating, reputation and geography. There are financial responsibility for each executive position in the Company.
separate limitations for groups of reinsurers and individual reinsurers. At
Ingosstrakh performs continuous evaluation and analysis of business pro-
the moment, the reinsurance portfolio is represented by first-rate players
cesses in place with a view to their potential optimization as par of the
with the ratings of at least S&P BBB- and Moody’s Baa3. Each reinsurer cov-
Business Processes Reengineering Strategic Project. In 2006, the Company
ers the maximum of 5% of the overall number of reinsurable assets, which
completed the first and most important phases of the projects, the opti-
signs the lack of influence of individual reinsurers. The Company is working
mization of car insurance business processes. Along the improvement of
to maintain and set up new contacts with reliable reinsurers.
this business processes in general, the Company in conjunction with Ernst
As to the credit risk of third parties, the Company follows the traditional & Young completed the audit of the claims settlement process of settle-
limitation method. In 2006, the Company developed and approved a spe- ment of motor vehicle insurance claims. The effect of the foregoing ac-
cial system to determine the terms and procedures in relation to commer- tions enabled the Company to outstrip the budgeted business efficiency
cial loans available under insurance, co-insurance and reinsurance contracts. parameters.
Pursuant to the system, the following limits are available for insurance, co-
insurance and reinsurance contracts:
limit per maximum size of a commercial loan; The Company is focused on improving information security of the cor-
limit per maximum grace period; porate information system through analysis of IT risks pertaining to key
limit per maximum number of payments; business processes. The IS improvement effort is tailored to incorporate
limit per maximum period of payment by installments. requirements of the RF laws on protection of information and the guide-
lines offered by international information security standards.
The limits are determined in the context of:
level of authorized commercial loans signatories; In 2006 the Company approved the update of the Guidelines on Sensi-
line of business tive and Confidential Information and Version 2.0 of the Regulations on
Protection of Personal Information of OSAO Ingosstrakh Employees. These
documents set out a consistent approach to protection of sensitive and The encryption will involve the use of the RF-certified encryption algorithm
confidential information and the extent of liability for its disclosure. (GOST 28147-89) developed by Signal-Com. The Company conducted
activities to ensure availability and adequacy of software licenses in the
Currently, to improve availability and accessibility of centralized informa-
central corporate offices.
tion systems and to ensure their reliability the Company is working on the
creation of a Back-Up IT Center and a back-up data repository on EMC Additionally, the Company completed the evaluation of the new corporate
Symmetrix DMX-3 platform in its central venue at 12, Pyatnizkaya St. in information projects (Contact Center — Siebel CRM and the Mobile Office)
Moscow. and developed requirements to information security binding for these in-
There was completed a range of organizational and technical initiatives to
build up protection of corporate data and information system from unau- Personnel
thorized access: the Company upgraded its corporate password protection
The Company is focused on identification, prevention and interception of
subsystem (which involved the use of group password protection policies
abusive practices and breaches in its divisions. In 2006, the Company devel-
in the Corporate Active Directory and modification of the AIS password
oped and improved guidelines and methodological recommendations on
protection module). The Company implemented the RSA Keon-based
elimination of corrupt practices among the personnel of the Company. In
electronic digital signature and Sanctuary Device Control by SecureWave,
addition, the General Director helmed a field audit of Ingosstrakh branches.
a subsystem which allows the blocking of unauthorized connection of ex-
The audit proved to be a relevant instrument in controlling the activities
ternal drivers and devices to work stations. The number of remote offices
of the branches. The findings of fraud, corrupt or abusive practices, em-
connected to the corporate resources via a protected VPN built with the
bezzlement and disloyalty towards the Company resulted in immediate
use of CheckPoint hardware and software, now totals 162.
changes in the personnel. As the final phase of this undertaking, at the end
Throughout 2006, the Company channeled its resources in improving the of October 2006, the Company approved and introduced Ingosstrakh’s
reliability of corporate information systems. The key deliverable was the Ethics Code. The Code sets down basic corporate principles of relations
creation of a powerful integrated anti-virus protection of the Company’s among the employees, clients and governmental based on legal compli-
internet traffic and the implementation of e-mail spam filters on Aladdin’s ance, respect of personal rights, honest and fair business, and creation of
eSafe platform. The Company dovetailed the corporate encryption tools a mutually-beneficial environment for cooperation etc. The Code contrib-
with applicable legal requirements: there was initiated a project to intro- utes to the support and development of the corporate culture necessary
duce data encryption for information communicated via open channel. to achieve the highest standards in meeting our business goals.
Communications and GR
Relations with Governmental Organizations and NGOs. PR Activities.
Sponsorship and Charity
Relations with Governmental pR Activities
organizations and nGos Being the leader in the Russian market of insurance services, Ingosstrakh’s
PR efforts are targeted at strengthening the Company’s positive image
In 2006 Ingosstrakh continued its effort towards improving and expanding and at enhancement of the overall insurance culture in the society. The
relations with governmental and public organizations in order create a fa- tool that enables the Company to tackle these objectives successfully is
vorable environment that could contribute to the Company’s efficiency. the Company’s efficient interface with mass media. Ingosstrakh bases its
relationship with journalists and partners on the principle of information
One of the key areas for the Company last year was the participation of
transparency and mutual respect.
its professionals in the analysis and development of proposals regarding
amendment and supplementation of the effective legislation which gov- The Company’s information policy in 2006 was primarily targeted at pro-
erns the Company’s activities, in particular, the bills of law ‘On Incorpora- moting insurance services and at in-depth coverage of Ingosstrakh’s ac-
tion of Changes in the Federal Laws on Compulsory Liability Insurance of tivities in the press. 2006 was the second year of The Risk Factor, a show
Motor Vehicle Owners’, ‘On Basics of Tourism’, ‘On Protection of Com- on The Echo of Moscow radio station. A namesake column is run in the
petition’, and ‘On Agricultural Development. The professional team also Arguments and Facts, one of Russia’s most popular papers. The Company’s
worked on the elaboration of Orders from the RF Ministry of Finance on experts are key speakers in surveys of insurance services and related sub-
the rules and procedures of insurance reserve development by insurers jects in the federal press and on television. Ingosstrakh is one of the major
and on the approval of requirements to capital adequacy of assets contrib- newsmakers in the insurance media-field.
utable as coverage of insurer’s own funds in terms of their array and struc-
Ingosstrakh is working on its information coverage and promotion not only
ture. The laws were approved and put into effect in 2006. The Company’s
in Moscow but across many other cities in Russia, and this effort results in
experts continued as active participants in the development of bills of law
feature publications on insurance in the regional press. In November 2006
on incorporation of changes in the RF laws ‘On Insurance Businesses’, ‘On
the Company gathered again representatives of leading regional media to
Compulsory Liability Insurance for Damages Caused Through Operation of
Moscow to attend a three-day seminar on insurance, Ingosstrakh’s central
a Hazardous Facility’ and other draft bills on changes in the RF Tax Code
office being the venue of the event.
and other legal instruments.
Altogether, in 2006 the total number of publications and informational
Ingosstrakh is the member of more than 60 professional public organiza-
releases involving Ingosstrakh in web news, prints, on radio and television
tions (All-Russia Insurers Union, Russian Association of Insurers and other).
ran over 3000, including over 1500 released in the national press.
Such membership provides the Company with an efficient mechanism to
develop and reconcile the position of professional market participants in According to the Medialogy, an information and analytical system, in 2006
relation to the issued which determine further development trends for in- its informational favorability index made Ingosstrakh first in the rating of
surance businesses in Russia. Russian insurers. The expert team of the International University in Mos-
cow affirms that the bulk share of information on Ingosstrakh in the overall
Moreover, as part of its cooperation with federal state authorities the Com-
quantity of information on insurance companies remained at the level of
pany’s representatives are members of consultative and advisory bodies
14%, which is as high as in 2005.
(Expert Councils of the Federal Insurance Supervisory Authority, the Rus-
sian Federation Chamber of Accounts, various committees under the State In May 2006, Ingosstrakh received the Golden Diploma-2006 from the Na-
Duma and other). tional Financial Award of the Financial Press Club of Russia ‘for information
transparency and impeccable business reputation.’ In October 2006, In-
gosstrakh was nominated the most transparent company in the Expert-400
Moreover, Ingosstrakh became official partner of the final match of the
Sponsorship and Charity Davis Cup between Russia’s and Argentina’s national tennis teams, and it
sponsored the Russian national tennis team in the final games of the cup
Ingosstrakh is one of Russia’s largest and oldest insurance companies. It ac-
held on December 1–3, 2006 in Moscow on the Olympic Stadium.
knowledges its responsibility to the society. Over the past several decades,
charity has become part and parcel of the Company’s business. On the threshold of inauguration of the Russian Ice Hockey Championship
with the participation of Superleague teams, Ingosstrakh became official
In 2006, Ingosstrakh continued cooperation with the Russian ‘HELP’ Foun-
partners of the Russian Hockey Federation. The contract arrangements cov-
dation of the Kommersant Ъ Publishers. The Company transferred over
er all games of the Russian Hockey Championship with the participation of
RUB3.7 mln to cover medical treatment of seriously ill children whose par-
Superleague teams in 2006-2007 season, the games of the Russian National
ents referred to the Foundation for financial assistance.
Team in the Eurohockeytour, including the games of the Channel 1 Cup,
For ten years Ingosstrakh has been an active participant of a UNESCO participation of the Russian Youth Team in the Four Nations Cup in Sweden
project ‘Books For Blind Children’. and the Czech Republic, international matches in Canada and Russia and the
Under-20 World Junior Hockey Championship for male teams in Sweden.
Ingosstrakh offered charitable assistance to the organizers of 5th National
Besides, Ingosstrakh acted as the insurer of players on the national teams
Delphic Games in Krasnoyarsk on May 19–24 2006.
during their travel outside Russia to participate in international games.
In the run up to the International Children’s Day on June 01 2006 Ingoss-
In 2006, the Olympic Assets, a joint project run by Ingosstrakh and the
trakh allocated funds to arrange two performances of the Russian National
USSR Hockey Legends Club, proved to be a successful undertaking. Dur-
Academic Symphony Svetlanov Orchestra in the Russian Clinical Children’s
ing the tour of Russian cities with the ‘golden series’ of games the USSR
Hospital and in the Morozov Children’s Hospital.
Hockey Legends Team which encompassed the veteran of Russian hockey,
In addition, in 2006 Ingosstrakh offered financial assistance to the Children’s winners of 24 Golden Olympic Medals and 83 medals of World Cups, se-
Hearts Charitable Foundation. The money was channeled to cover the cost lected hockey beginners (y.o.b. 1995) from a number of regional sports
of a number of heart surgeries on children with cardiac anomalies. schools to join a new national children’s hockey team. The future champi-
ons were taken to Moscow to attend the spectacular match between the
Also, throughout the previous year the Company supported financially the
USSR Hockey Legends and the International World Hockey Stars Team in
Disabled Association of Great Patriotic War Veterans and people in need
January 2006. The children also attended a series of master classes offered
of financial support; it supported budget cultural institutions.
by the greatest sportsmen of the world.
In its sponsorship initiatives Ingosstrakh is an active supporter of national
The Company places high emphasis on projects in arts and culture.
In 2006, Ingosstrakh partnered for the seventh time in the run with In-
In September 2006, Ingosstrakh and the Russian National Volleyball Federation
termuzeum-2006 7th Russian National Museum Festival. Traditionally, In-
signed a partnership agreement. Pursuant to the agreement, Ingosstrakh will
gosstrakh offered two nominations, ‘Professional Honor and Dignity’ and
continue to be partner of the Federation for the third year running and will
‘Loyalty and Devotion’. Over the past seven years, seventy employees of
provide general sponsorship to the Russian Volleyball Male Championship.
various museums were noted for their achievements and named winners
2006 was Ingosstrakh’s fifth year as General Partner and Official Issuer of in these nominations.
the International Kremlin Cup Tennis Tournament. Ingosstrakh provides
Besides, Ingosstrakh was the official partner of the celebration concert
liability insurance of the Kremlin Cup organizers covering third-party life,
dedicated to the 70th anniversary of the Russian National Academic Sym-
health and property damage, including visitors, spectators, guests, em-
phony Svetlanov Orchestra in the Great Hall of the Moscow Conservatory
ployees and tenants during or in connection with the event. The liability
on October 5, 2006.
limit topped RUB 130 mln.
Key Financial and Economic Indicators
Audit opinion on the accounting reports. Performance Results. Financial Strength Ratings. Balance Sheet.
Largest Insurance Events of Ingosstrakh in the Last Years. Bank Details of Ingosstrakh
Audit opinion on the accounting
We performed an audit of the attached accounting report of Ingosstrakh for the period from January
1 to December 31, 2006, inclusive, that consists of the accounting balance sheet, income and loss
statement, statement of changes in capital, cash flow statement, appendices to the accounting balance
sheet and explanatory memorandum, paragraphs 5-26. Responsibility for keeping accounting records,
preparation and presentation of this accounting report lies with the management of Ingosstrakh. Our
task is to express our opinion about accuracy of the report in all material aspects and about compliance
of the accounting procedures in terms of drafting of the accounting report with the legislation of the
about Accounting Reports of
Russian Federation based on the performed audit.
Open Joint-Stock Insurance Company Ingosstrakh
We performed an audit in compliance with Federal Law on Auditing Practices, Federal Rules
(Standards) of Auditing Practices, Rules (Standards) of Auditing Practices approved by the
To the Shareholders and the Board of Directors of Ingosstrakh
Commission on Auditing Practices of the President of the Russian Federation and the International
Information about the Auditor
The audit was planned and performed in such a manner as to be reasonably sure that the accounting
Name: Ernst and Young, Ltd.
reports do not contain material distortions. Audit was performed on a sample basis and included
test-based study of evidence confirming index numbers and disclosure of information about financial
Location: 115035 Russia, Moscow, Sadovnicheskaya nab. 77-1
and economic activities in the accounting report, evaluation of compliance with the accounting
principles and rules used to prepare the accounting report, analysis of material estimated figures of
The Certificate of inclusion into the Uniform State Register of Legal Entities of a legal entity
the management of the audited entity, as well as evaluation of general presentation of the accounting
registered before July 1, 2002, the date of entry – December 05, 2002, 77 #007367150, registered by
report. We believe that the performed audit gives sufficient grounds to express our opinion about
the State Moscow Registration Chamber on June 20, 2002, #108.877, main state registration number
accuracy in all material aspects of the accounting report and about compliance of accounting practices
in terms of preparation of the accounting report with the legislation of the Russian Federation.
The license for audit practice #E002138 was approved by the Ministry of Finance of the Russian
In our opinion, in 2006, accounting practices in terms of preparation of the accounting report of
Federation as of September 30, 2002, #223, issued for five years.
Ingosstrakh met in all material aspects the requirements of Federal Law on Accounting #129-FZ
dated November 21, 1996, and the aforementioned accounting report prepared in compliance with
Membership in the accredited professional audit union – Ernst and Young, Ltd. is a member of
the above Law reflects accurately in all material aspects the financial situation of Ingosstrakh as of
non-for-profit partnership Institute of Professional Accountants and Auditors of Russia (NP “IPB
December 31, 2006, and results of its financial and economic performance in the period from January
1 to December 31, 2006, inclusive, in compliance with the requirements of the legislation of the
Russian Federation in terms of preparing the accounting report.
Information about the entity under audit
The attached accounting report is not intended to demonstrate the financial standing or performance
Name: OSAO Ingosstrakh
results in accordance with accounting principles and methods generally recognized in countries
or other administrative and territorial entities besides the Russian Federation. Thus, the attached
Location: 115998 Russia, Moscow, GSP-8, Piatnizkaya 12, building 2
accounting report is not intended for people not familiar with the principles, procedures and methods
of accounting recognized in the Russian Federation.
State Registration: #1027739362474 as of October 11, 2002
March 29, 2007
Vinogradova A.M. Signed
Head of the Audit
Valetskaya S.Y. Signed
Qualification certificate entitling to perform audit in the field of auditing of insurers № K 026735,
issued in perpetuity on November 9, 2006.
performance Results Financial Strength Ratings
In 2006, premium income totaled RUB 34.1 bln, which is by 20.3% more High financial and economic results and transparency of Ingosstrakh were
than in the previous year. The Company’s net profit reached the record of confirmed by international and Russian rating agencies.
RUB 1.9 bln, which is a maximum result not only in the history of the Com-
In 2006, the Company’s credit rating was revised upwards by two interna-
pany but also of the insurance market. Profits grew by 102.6% versus 2005.
tional rating agencies — Standard&Poor`s to «ВВ+» and Moody’s Investors
This was a result of very positive insurance performance and a record-high
Service to Ва1, both with a stable outlook.
investment income as described above. Due to higher profits, the Com-
pany raised its authorized capital by 27% to RUB 8.3 bln. The Company’s ratings are given in the table below as of 31.12.2006:
The Company’s ratings are given in the table below as of 31.12.2006
Rating Agencies Ingosstrakh’s Rating Rating Scale Actual Date
Standard&Poor`s BB+, stable outlook International 27 06 2006
ruAA+, stable outlook Russian
Moody’s Investors Service Ba1, stable outlook International 06 12 2006
Аа1 ru (long-term) Russian
Expert RА А++ Russian 19 12 2006
Statement of income reporting for the period ended 31 12 2006
Statement of income reporting for the period ended 31.12.2006
I. Insurance activity 2006 2005
Premiums earned, net of reinsurance 25 165 266 19 139 564
Claims incurred, net of reinsurance (15 236 564) (12 833 254)
Change in other insurance reserves (1 412 568) (959 917)
Acquisition costs, net of reinsurance (4 581 176) (3 541 537)
Other operating expenses (117 397) (96 888)
Operating income 3 817 561 1 707 968
II. Other gains and losses
Gains less losses from investment activity 2 729 819 1 782 678
Administrative expenses (2 950 117) (1 693 545)
Non-operating income less expenses (930 428) (358 575)
Income before tax 2 666 835 1 438 526
Income tax expenses (756 506) (488 783)
Net income (loss) 1 910 329 949 743
2006 Balance sheet
I. Assets 2005 2006
Intangible assets 10 049 8 577
Investment property 205 693 203 600
Investments in subsidiaries and associates 1 812 449 2 014 447
Other investments 7 210 435 6 181 056
Amounts due from credit institutions 8 813 526 15 542 476
Reinsurance share in insurance reserves 4 802 497 9 041 564
Insurance and reinsurance receivables 4 771 501 5 247 049
Other assets 1 005 682 1 126 610
Property and equipment 2 391 566 2 399 267
Deferred tax assets 96 571 71 509
Cash 1 260 034 1 887 993
Total on section I 32 380 003 43 724 148
BALANCE 32 380 003 43 724 148
II. Capital and reserves
Share capital 2 500 000 2 500 000
Additional paid-in capital 444 852 439 813
Reserves 1 000 000 1 000 000
Retained earnings (uncovered loss) 2 582 537 4 372 930
Total on section II 6 527 389 8 312 743
2006 Balance sheet
III. Insurance reserves 2005 2006
Unearned premium reserve 12 301 497 14 919 810
Loss reserves 9 290 367 14 381 987
Other insurance reserves 2 692 369 4 089 242
Total on section III 24 284 233 33 391 039
Insurance and reinsurance payables 1 225 639 1 706 082
Other payables 121 589 121 553
Dividends payable 309 718
Deferred tax liability 171 757 145 867
Deferred income 5 820 8 938
Preventive measures reserve 43 267 37 208
Total on section IV 1 568 381 2 020 366
BALANCE 32 380 003 43 724 148
largest Insurance events of Bank Details of Ingosstrakh
Ingosstrakh in the last Years Full Company Name: Open Joint-Stock Company Ingosstrakh
USD 84.6 ml — total loss of the Cupon satellite (1998) Short Name: OSAO Ingosstrakh
USD 56.2 ml — loss of cargo in a plane crash in Irkutsk (1997, settled in 115998, Moscow, Piatnizkaya st., 12, building 2.
USD 40.1 ml — fire in the pharmaceutical warehouse, first part of com-
pensation (50% of total amount) (2006)
USD 16.5 ml — total loss of aircraft А-310 in Irkutsk (2006)
Settlement Account 40701810200010000001
USD 12.2 ml — total loss of Express-A satellite #1 (2000)
In AKB Soyuz (ОАО)
USD 9.0 ml — damage to irrigation system under construction caused by
natural calamity (1997, settled in 2000) Correspondent Account 30101810400000000122
USD 7.0 ml — fire in Samara Metallurgical Plant (2000, settled in 2002) BIK 044585122
USD 6.6 ml — fire on the destroyer under construction (2006) Mailing Address of the Head Office
USD 5.0 ml — total loss of aircraft SU-30MK during demonstration flight 127994, Moscow, GSP-4, Lesnaya st.,41
in Le Burge (1999)
Address of the 55th post office: 127055 Novoslobodskaya st., 49/2
USD 4.4 ml — total loss of Express-AM11 satellite (2006)
Phones: phone inquiry service of DKS 956-5555, general phone inquiry
USD 3.5 ml — berthing impact of Ivan Papanin at a tanker terminal service of Ingosstrakh 232-3211
Fax: Lesnaya, 41 (495) 959-4518, 234-3600, 234-3601; Piatnizkaya, 12
Telex: 411144 INGS RU
Website: www ingos ru
Foreign Network. Representative Offices of Ingosstrakh Abroad.
Affiliated Companies Abroad. Affiliated Companies in Russia
Foreign network Representative offices
In 2006, foreign companies of INGO Group demonstrated sustainable of Ingosstrakh Abroad
growth rate. Total premium income in the group amounted to USD 202 ml
versus USD 175 ml in the previous period.
Representative Office in the Republic of Azerbaijan
The capitalization of foreign companies increased by 50% and totaled USD Republic of Azerbaijan,
87 ml year end. AZ100, Baku, A Zeinaly st , 31—33
We consistently implemented the leadership strategy in neighboring coun- Phone: +994 (12) 497-03-31, 497-18-48
tries which resulted in an increase of Ingosstrakh companies’ premium in- E-mail: ingosstrakh@ingos az
come in the CIS countries by 1.5 times versus 2005. The most convincing
results were demonstrated by Ingosstrakh’s flagship project in neighboring Representative Office in the Republic of Kazakhstan
countries — INGO Ukraine attained a 50% increase in premium income in Republic of Kazakhstan, 480021,
2006. Almaty, pr Dostyk, 43,office 501, Business Center Dostyk
Phone: +7 (3272) 58-82-88
Ingosstrakh’s affiliates in Ukraine, Kyrgyz Republic and Armenia are among
the leading insurers in national ratings. Fax: +7 (3272) 58-45-54
E-mail: info ingos@mail online kz
Ingosstrakh’s companies in the Western Europe increased their premium
income by 5%, which is an indicator of stable position in the developed Representative Office in the Republic of Uzbekistan
markets. Republic of Uzbekistan, 700015, Tashkent, Afrosiab st , 12Б
Ingosstrakh’s divisions in China, India, Kazakhsan, Uzbekistan and Azerbai- Phone: +998 (71) 152-28-98
jan were also successful. Phone/Fax: +998 (71) 140-04-74
E-mail: ingos@sks ru
Highlights of 2006:
authorized capital of INGO Ukraine increased by USD 4 ml;
сlosing of transaction to attract strategic investor, the Belgian State Representative Office in Ukraine
Credit Insurance Company (ONDD) for SAO Garant; Ukraine, 04050, Kyiv, Pimonenko st , 13, office 6А/16
new shareholder increased the authorized capital of SAO Garant to Phone/Fax: +380 (44) 247-69-66, 247-69-67
Euro 25 ml; E-mail: ingosstrakh@ingos com ua
authorized capital of INGO Armenia increased by USD 600 thou-
sand; Representation in India
SAO Balva withdrew from the group of shareholders; Ingosstrakh Mumbai Representative Office,
completed liquidation of INGO, Inc. that acted as Ingosstrakh’s repre- Stock Exchange Building, 20th floor
sentation in the United States of America; East Wing Dalai St , Mumbai, 400023, India
introduction of common reporting system for companies in order to Phone: +91 (22) 22-72-19-56
monitor current performance and prepare data under IFRS;
Fax: +91 (22) 22-72-19-06
limits approved for net retention for affiliates by types of insurance;
E-mail: ingoind@vsnl com
development of underwriting policy for the Ingosstrakh Group.
Representation in China Joint-Stock Insurance Company Ingo Ukraine
Ingosstrakh Beijing Representative Office, Ukraine, 01054, Kyiv, Vorovskogo st , 33 Affiliated Companies
Phone: +380 (44) 490-27-45, 490-27-49
Suite 1 702, Guangming Building,
Liangmaqiao Road, Chaoyang District, Fax: +380 (44) 490-27-48 in Russia
Beijing, 100016, China E-mail: office@ingo com ua
Phone: +86 (10) 64-68-58-52 Limited Liability Insurance Compa-
Closed Joint-Stock Insurance Company Ingo
Fax: +86 (10) 64-68-58-53 ny Ingosstrakh Life
E-mail: vladimir@ingoss com Moscow, B Tulskaya st , 10, building 1
Republic of Armenia,
375002, Yerevan, Demirchiana st , 38 Phone: +7 (495) 725-73-46
Phone: +374 (10) 543-134 Fax: +7 (495) 725-73-40
Affiliated Companies Fax: +374 (10) 543-135 E-mail: life@ingos ru
E-mail: efes@arminco com
Closed Joint-Stock Insurance Company Limited Liability Company Team
Schwarzmeer und Ostsee, Belingosstrakh Assistance
Versicherungs-Aktiengesellschaft, SOVAG, Republic of Belarus, Moscow, B Tulskaya st , 10, building 9
Schwanenwik 37, 22087 Hamburg, Germany 220050, Minsk, Miasnikova st , 40 Phone/fax: +7 (495) 232-34-89
Phone: +49 (40) 227-12-80 Phone: +375 (17) 203-58-78 E-mail: timasis@tim ingos ru
Fax: +49 (40) 22-57-19 Fax: +375 (17) 217-84-19, 217-84-41 http://www tim su
E-mail: info@sovag de E-mail: bigs1@mail belpak by
www sovag de Limited Liability Insurance Compa-
Joint-Stock Insurance Company ny Ingosstrakh-M
GARANT, Versicherungs-Aktiengesellschaft, Kyrgyzinstrakh
Kyrgyz Republic, Moscow, B Tulskaya st , 10, building 9
Wohllebengasse 4, Postfach 200, Phone/fax: +7 (495) 232-34-91
720000, Bishkek, Chui pr , 219
A-1040 Vienna, Austria Phone: +996 (312) 21-95-54 E-mail: Ingos-m@ingos ru
Phone: +43 (1) 505-28-96 Phone/Fax: +996 (312) 21-99-44
Fax: +43 (1) 505-28-96-30 E-mail: kinstrakh@infotel kg
E-mail: info@garantinsurance com Open Joint-Stock Insurance Com-
www garantinsurance com pany Chrezvychainaya Strakhovaya
Vakuutusosakeyhtio IngoNord, Russia, Moscow
Salomonkatu 5C PL 218, 00101 Moscow, 2nd Samotechnyi per , 7
Helsinki, Finland Phone: +7 (495) 780-50-05
Phone: +358 (9) 251-03-00 E-mail: chsk@chsk ru
Fax: +358 (9) 251-03-099, 693-35-60 http://www chsk ru/index php
E-mail: info@ingonord com
www ingonord com
At the end of the 1980s, the Company started insuring commercial risks,
Creation of Ingosstrakh (1947–1948) loans, joint-ventures, various types of civil and professional liability.
November 16 1947 is the date of creation of Ingosstrakh. This was when
the USSR Council of Ministers signed Decree No 3819-1281c ‘On Establish-
ment of Foreign Insurance Department of the USSR (Ingosstrakh) on the Time of Change (1991–1997)
basis of the USSR Department of Foreign Transactions of the USSR State
In 1991, Ingosstrakh was transformed into a publicly traded, or open
Insurance’. In 1948, Ingosstrakh provided five insurance products: cargo
joint-stock company. The size of its equity capital increased more than 7.5
insurance, fire insurance, hull insurance of vessels, liability insurance and
In 1994, Ingosstrakh received a new insurance and reinsurance license.
In 1997, the company signed an Incorporation Agreement for transna-
Conquest of the World (1950–1971) tional group Ingosstrakh.
In 1952, Ingosstrakh inaugurated its representative office in Finland. In the
period between 1953 and 1971 it launched representative office in Paki-
stan (1953), Egypt (1954), Afghanistan (1955), and Algeria (1963), in Mali Endurance Test (1998–1999)
(1963) and Cuba (1971).
Following the default of 1998, Ingosstrakh managed to retain stability and
In 1956-1964, Ingosstrakh’s affiliate Blackbulcy (UK) established and displayed convincing development trends maintaining its key asset, the
launched branch offices in France, Egypt (1956), Syria (1958), Lebanon trust of its clients and its one of Russia’s most professional insurance teams.
(1961) and Sudan (1964). The paid up equity of the Company increased from RUB 30 mln to RUB
In 1958, Garant, an insurance company, was incorporated in Austria.
Ingosstrakh is the first Russian company to offer Bankers Blanket Bonds to
In 1967, a Soviet-Indian insurance bureau was set going in Bombay (Mumbai).
its clients alongside with commercial insurance of export loans and guaran-
Some of these Ingosstrakh’s representative offices continue nowadays. tees and a range of programs to insure professional liability. The Company
commissioned its representative office in China.
At the end of 1998, the Ingosstrakh network encompassed 42 units in the
Step by Step (1972–1990) territory of the Russian Federation and 10 subsidiaries and representative
offices in Europe, Asia and North America.
On 20 July 1972, the USSR Council of Ministers issued a resolution. Pursu-
ant to it, Ingosstrakh acquired the status of the Foreign Insurance Head- In 1999, Ingosstrakh managed to extend the scope of its pre-default op-
quarters of the USSR. At the same time Ingosstrakh’s legal status changed, erations. The number of insurance products offered by the Company in-
which enabled it to operate abroad and domestically, when necessary, as creased to reach 66.
a joint stock insurer.
In 1972, Ingosstrakh started providing liability insurance to ship owners, as
well as launched insurance products for construction works, assembling
operations and aviation. During the same year the array of products ex-
panded to reach twenty in number.
new perspectives (2000–2004) latest Developments (2005–2006)
In 2000, Ingosstrakh obtained А++ reliability rating, the highest possible In July 2005, Ingosstrakh registered changes to the Charter following the
from Expert RA, an independent rating agency. Its equity capital increased increase of the Company’s equity capital to RUB2.5 mln.
to RUB500 mln.
In December 2005, Ingosstrakh received new licenses which enabled the
By 2002 the Company held licenses for 77 types of insurance operations, Company to perform all types of insurance (with a view to the Company’s
its regional network expanded to 140 units. specialization) and reinsurance activities pursuant to Article 32.9 of the RF
Law ‘On Insurance Business in the Russian Federation’. In 2005, the Com-
A new agreement on transnational group Ingosstrakh was signed.
pany’s insurance premiums exceeded USD1bn, the record-breaking level
2003 became the first year in Ingosstrakh’s history when its insurance pre- in the whole of the Company’s 60 years in business.
miums topped USD500 mln.
In 2006, Standard & Poor’s Ratings Services assigned “BB+” long-term
The Company launched offices in Ukraine, Azerbaijan and Uzbekistan. counterparty credit and insurer financial strength ratings to Ingosstrakh,
stable outlook, while the Company’s national rating went a notch up to
Transnational Group Ingosstrakh was joined by Ostra-Kiev (Ukraine) and
Efes (Armenia). The number of types of licensed insurance activities was
extended to 87. In Rome, Ingosstrakh signed Cooperation Memorandums with the insur-
ers from the Italian SACE Spa and SACE BT groups of insurance compa-
On May 12, 2004, Standard & Poor’s Ratings Services announced that it
nies. The Memorandums foresee active involvement of the parties in the
has assigned its “BB” long-term counterparty credit and insurer financial
support and development of trade relationship between Italy and Russian
strength ratings to Ingosstrakh, stable outlook, while Russian national rat-
through insurance of credit risks of national exporters.
ings positioned Ingosstrakh as ruAA.
In April 2006, Ingosstrakh joined OJSC ‘Chrezvychainaya Insurance Com-
On May 25, 2004, Ingosstrakh issued a corporate decision on an additional
pany’ and purchased 71.25% of its shares from GUTA Group. The deal
share issue to increase its equity capital to RUB2 mln.
was part of the capital concentration process in the national insurance
On August 27, 2004, an Incorporation Agreement was signed in Helsinki to marketplace and was a preliminary step on the way to Russia’s access to
set up INGO International Insurance Group. The Group united insurers and the WTO.
auxiliary insurance and reinsurance service companies whose controlling
In June 2006, was finalized the access of Office National du Ducroire Com-
interests are held by Ingosstrakh.
pany, a Belgian Export Credit Agency in the equity capital of Ingosstarkh’s
In December 2004, Moody’s Investors Service assigned to Ingosstrakh Ba2/ affiliate Garant. For the first time in history the international credit insur-
Positive Insurer financial strength rating. Almost simultaneously, Moody’s In- ance market witnessed the creation of a Russian — European insurance
terfax Rating Agency assigned to the Company Aa3 (rus) long-term credit partnership.
rating and RUS-1 short-term credit rating on the national rating scale.
In December 2006, Moody’s Investors Service boosted Ingosstrakh’s in-
surance financial strength rating up a notch to Ba1 level, stable outlook.
Simultaneously, Moody’s Interfax Rating Agency announced the Company’s
long-term insurance rating to go up Aa1.ru on the national scale.