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Renaissance Insurance Group is one of the largest private insurers in Russia. The company operates both in risk insurance — motor, property, health — and in endowment life insurance. Its shares trade on the Moscow Exchange under the ticker RENI.
An insurer has two sources of earnings, and the second is often more important than the first. The first is the underwriting result: the difference between the premiums collected and the claims paid together with the costs of running the business. It can be negative, and that is not necessarily a failure.
The second is investment income. Premiums come in today, while claims are paid later, and for all that time the money is invested in bonds and deposits. When interest rates are high, such a portfolio generates substantial income, and it is capable of offsetting a weak underwriting result.
Endowment life insurance works differently from risk insurance: the client pays in for years, the money accumulates, and for the company these are long and predictable liabilities — the very thing that allows it to invest for the long term.
Comprehensive motor policies and compulsory liability insurance — the most mass-market segment.
Endowment and investment programmes with a long horizon.
Policies for companies and individuals: health, property, liability.
Investment of the collected premiums in bonds and deposits until claims fall due.
Strengths and weaknesses describe the business itself. Opportunities and threats describe what may happen around it.
The company sells insurance policies: motor, medical and property, as well as endowment life insurance programmes. It invests the collected premiums until claims fall due.
In two ways. The first is the difference between the premiums received and the claims paid together with expenses. The second is the income from investing the premiums: the money comes in before the claims are paid, and for all that time it is at work.
Because their investment portfolio consists predominantly of bonds and deposits. When interest rates are high it earns more, and this is capable of offsetting a weak result in insurance itself.