In conjunction with the "Far from home" feature appearing in the January 2013 print issue on life insurance sales in emerging market countries, NUL Senior Editor Warren S. Hersch questioned insurance professionals from several of these nations about their practices. The following are written responses from Egor Kosolapov, a managing director, independent financial adviser and investment consultant with the Association of Independent Financial Advisers—Russia, OOO Findis, based in Moscow, Russia.
Hersch: How would you describe your life insurance/financial service practice? What are your areas of expertise? Whom do you serve?
Kosolapov: As an independent financial adviser, I help my clients with various aspects of their financial lives. I always start with a structured financial planning process; and, by the end of first meeting, we both understand where the client financially is, where he or she wants to be, the financial gaps and what the possible solution may look like.
Hersch: How would you assess the current market for life insurance and annuities in Russia? Is the market growing or contracting?
Kosolapov: Compared to Europe, where the average annual premium per person is €1,070, the premium is only €5 in Russia. The market is growing—but very slowly. One of the major problems in Russia is that there is no tax advantage for individuals buying life insurance. And for most corporate clients there are no significant tax advantages.
Hersch: Which life insurance and annuities products are selling well in your practice?
Kosolapov: Term insurance, accidental insurance, medical insurance and endowments are selling well.
Hersch: Which life insurance-funded techniques (to be used, for example, in estate planning, business succession planning, executive compensation planning or retirement planning) are especially popular among your clients?
Kosolapov: Retirement planning through both life insurance and investment products are an essential part of our business. The average state pension in Russia is €235 per month compared to €1,000 in Europe. Obviously, the former is not enough.
We help our clients create their own pension fund so they can receive it when they retire.
Hersch: What regulatory, legislative and business challenges do you face in Russia? How do these challenges affect your practice?
Kosolapov: The market is totally unregulated in Russia, which leads to many fraudulent schemes and, as a consequence, general mistrust of people in financial services. Another problem is the lack of qualified sales professionals to meet with clients and do their job properly.
Hersch: How are you adapting your practice to meet these challenges and grow your business?
Kosolapov: We are doing smart recruiting, constant training and are joining professional associations like the Million Dollar Round Table (MDRT.)
Hersch: What financial goals and objectives have you established for your practice in 2013? How confident are you that you can reach these goals and objectives?
Kosolapov: We target our business to growth by 50 percent in 2013. That is absolutely achievable in a growing market like Russia.
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