NU Online News Service, July 30, 3:13 p.m. – Standard & Poor’s, New York, says the Russian insurance industry appears to be set for steady growth over the next five to 10 years.

The rating agency predicts the Russian insurance market will open to Western insurers, now that Allianz Group A.G., Munich, has decided to take a 45% stake in Rosno, a major Russian insurer.

A lack of faith in Russian financial institutions has been the largest hurdle facing the insurance industry, S&P analysts write.

The Russian insurance market has experienced a number of corporate failures in the past few years, in part because many insurers failed to meet new minimum solvency requirements. The Russians will need to funnel foreign capital into the industry to improve insurer solvency levels, S&P analysts write.

If Russia opens its insurance market to the rest of the world, it will be attractive to international players, according to S&P.

The average Russian spent $25 on insurance in 1999, compared with an average of $117 per resident in Poland and an average of $1,800 per resident in the European Union, the analysts note.

If insurance spending levels reached Western levels, the Russian market could generate as much as $200 billion a year in premium revenue, the analysts estimate.