| Abstrakt: |
The paper discusses the current state of Russia?s developing insurance market, particularly the ways insurers price risk and establish premiums. The Russian insurance market is new and it is developing in the context of macro-economic transition, and legal and regulatory vacuum. Whatever state-collected data are available to commercial insurance companies might be of questionable quality. Yet, because most companies do not specialize in a particular line of insurance, they do not have enough data of their own in any of the lines. Fierce competition and little rate regulation prevent data sharing and pooling between companies. Together with the lack of control over the quality of insurance services this makes many companies engage in price dumping when they offer premiums that are below any reasonable levels. In fact, unrestrained competition in a market where rates are not regulated makes insurance companies ignore data even where they have been accumulated. In the absence of means to turn uncertainty into risk, Russian insurers shadow-price each other, and resort to guess-work when determining premiums. They also sometimes take into consideration their customers? perceived ability to pay, offering higher premiums to ?more able? ones. The role of cooperation in setting premiums is emphasized. Whether the insurance market is successful in Russia will depend on how well insurers manage to replace opportunism and competitiveness by intra organizational trust and cooperation. [ABSTRACT FROM AUTHOR] |
