While much of the focus has traditionally been on the Far East as a potential alternative to mainstream protection and indemnity insurance, Russian marine insurers have been largely overlooked.

But there are five major insurance groups in Russia with substantial marine business lines that are currently eyeing growth in the international marine market.

The largest by far is Ingosstrakh, followed by AlfaStrakhovanie, Rosgosstrakh, Soglasie Insurance and Absolute Insurance.

Sozgaz is also a major Russian marine insurance provider, although its marine underwriting is predominantly aimed at parent company Gazprom.

Ingosstrakh turns over about $50m annually in P&I and hull and machinery revenues, with around 40% of its business placed in Russian-flag tonnage, and the rest in the international markets.

Market share

The company has a 60% share of the Russian P&I market, and is providing up to $1bn in reinsurance cover, mainly backed by A+ rated reinsurers in the London market. Its cover is provided based on UK P&I Club rules.

The company has formerly operated in cooperation with Gard and the UK P&I Club and is an International Group of P&I Clubs approved commercial insurer.

It previously had its own marine and aviation underwriting outpost in London through the Black Sea and Baltic Insurance company, which closed in the late 1990s.

Moscow Maritime Consortium's client manager Ekaterina Vlasova has been working in Russian marine insurance for more than 15 years. Photo: Moscow Maritime Consortium

The Moscow Maritime Consortium was established by Russian marine underwriting veteran Alex Timofeev last year to act as an agent to open up access to the international market for Russian P&I and hull and machinery underwriters.

Timofeev said inroads have been made but there are barriers. Sanctions, political uncertainty over Ukraine and Russia's credit rating are issues for many potential buyers of Russian P&I and hull and machinery cover.

Low profitability

From the Russian sellers side, there is a reluctance to commit resources to marine business when there has been comparatively low profitability in the sectors over recent years.

Timofeev is keen to let owners know what Russia has to offer, but his efforts have been hamstrung by travel restrictions during the pandemic.

To assist in winning international recognition, he has set up the Russian Union of Marine Underwriters.

He is aware that helping Russian underwriters expand in the international market will not happen overnight. "Yes, it will take time, and nobody knows the outcome but we have just started this company last year," he said.

"The marine insurance market has been operating at poor profit recently compared to other sectors, so some Russian underwriters think it's better not to take the risk or expand. The international market is risky. That is why the best way is to go is step by step," he said.

Positive indications

There are some signs that Moscow could make its mark. Russian ships under charter to non-Russian operators must carry a proportion of domestic P&I cover, which opens the door to possible collaboration with International Group clubs.

Timofeev said Russian insurers have made some inroads into the Greek market, which has the greatest potential for Russia's marine underwriters. "I need to travel to Greece because I want to make a good cooperation between Russia and Greece. We have more or less the same mentality," he said.

Timofeev points to the strong presence of the major US brokers in Moscow as an indication that international marine business with Russia can be done. "Generally, brokers like Willis, Marsh and Aon, they are represented here in Moscow, and have no problem writing Russian business, even being American companies," he said.

"The brokers who deal with Ingosstrakh know it meets and handles the claims, and that they are normal people," he added.

Yet one major doubt in the minds of potential buyers in the international market is whether Russian insurers will perform on claims.

In its marketing, Ingosstrakh outlines a series of major P&I claims it has paid out on in recent years, including a $5m payout for the trawler Ivan Golubets in 2019, and nearly $10m for the City grounding and wreck removal in 2016.

Another potential barrier is that the Russian insurers' S&P Global rating cannot be higher than Russia's national credit rating. S&P currently rates Russia and Ingosstrakh at BBB-.

Timofeev believes the Russian insurers would have a higher rating if they were based outside the country.