Russian insurance sector concentrated; Fitch

LONDON - Fitch Ratings Ltd. estimates that the number of core nonlife insurancegroups in Russia is likely to decrease to 12 to 15, from 20, in the next twoto three years, the ratings agency said in a special report.

The increasing concentration in Russia's non-life segment is driven by thedominant position of large carriers in corporate and retail insurance, whichis squeezing medium and small-sized regional players out of the market,Fitch said in its report, "Russian Insurance Sector: Concentration Trend."

Other contributing factors include the tightening of regulatory capitalrequirements and requirements relating to the structure of assets andunderwriting discipline, Fitch reported.

The share of the top 20 insurance groups in Russia's non-life insurancesector in terms of gross premiums written grew to 66% through the thirdquarter of 2006, from 55% in 2004, and is likely to continue to increase,Fitch said.

"Large insurance groups have been most successful in expanding theiroperations, growing faster than the market overall," said AnastasiaVoronkova, associate director in Fitch's Insurance team in Moscow, in astatement.