KASKO's value has surged substantially since the new year commenced.
KASKO Insurance in Russia Surges by 30% in 2025
Car insurance prices in Russia have taken a significant leap, with the average cost of a KASKO policy hitting 56,000 rubles in the first half of 2025. This represents a whopping 30% increase compared to the previous year, as per Yaroslav Ostudin, the big boss of insurance company "Astra-Volga."
So what's causing this price spike in KASKO policies? Ostudin has shed light on a few key culprits.
First off, the price of new vehicles and the associated repair costs are climbing, not to mention an upward trend in insurance compensation for accidents and damages, and an unfortunate incline in car thefts. In fact, in 2024, the average cost of KASKO was 49,000 rubles, and the year before that, it was 44,000 rubles.
But it's not just one factor at play here. The type of vehicle you own, along with the driver's experience and the owner's age, are still significant determinants of your KASKO policy cost.
Interestingly, the increase in KASKO policy prices is more subdued for popular Russian cars like Lada. For instance, the Granta model will cost you around 18,000 rubles, while the Vesta sets you back about 23,000 rubles. However, the story's different for Chinese cars, such as Chery and Geely, which have experienced a 40% increase and now cost about 80,000 rubles.
Policies for new Hyundai and Kia models typically hover around 40,000 rubles, covering both theft and total loss. But expect a slowdown in KASKO policy price growth to 3-7% in the latter half of the year, although another price spike might surface in January 2026.
Now, let's delve a bit deeper into the factors influencing this surge in KASKO policy prices.
- Claims and risk landscape: The insurance market in Russia has been dealing with a more complex and expensive claims environment, driving up insurers' costs and resulting in higher premiums.
- Reinsurance market disruptions: The departure of foreign reinsurers from the Russian market has caused a shrinkage in the reinsurance market, particularly for complex risks. This leaves insurers shouldering more risk on their own, leading to premium increases to maintain profitability.
- Digitalization and regulatory changes: The insurance sector is experiencing a shift toward digitization, with initiatives like the rollout of mandatory e-OSAGO, and changes in pricing regulations impacting the calculation and collection of premiums. Although these digital initiatives help cut acquisition costs, they also contribute to the evolving pricing landscape.
- Inflation and economic factors: General inflation in the costs associated with car repairs, spare parts, and labor likely plays a role in the upward trend in insurance premiums.
- Litigation and data protection costs: There's been a noticeable increase in court cases related to personal data breaches in Russia, leading to insurers' increased compliance costs and risk exposure. While indirect, these rising regulatory fines and the consequent push for enhanced data protection efforts can ultimately lead to higher policy prices.
The surge in KASKO insurance prices in Russia can be attributed to a more complex and expensive claims environment within the industry, driving up insurers' costs and resulting in higher premiums. Furthermore, the departure of foreign reinsurers from the Russian market has caused a shrinkage in the reinsurance market, particularly for complex risks, leaving insurers shouldering more risk on their own and leading to premium increases to maintain profitability.
