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 Mikhail Petrov, a financial adviser with Allianz ROSNO Life, 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?
Petrov: My areas of expertise are in life insurance, accident and sickness insurance, savings for children and personal retirement funds for families and businesses.
Hersch: How would you assess the current market for life insurance and annuities in Russia? Is the market growing or contracting?
Petrov: Life insurance is growing but mainly due to the banking sector. Life insurance is part of personal financial planning; just 15 years ago the market was practically nonexistent. That is why it has been so difficult for life insurance agents in the agency sector. More and more of them are looking to other countries that are interested in using the tools of financial planning.
Hersch: Which life insurance and annuities products are selling well in your practice?
Petrov: Credit insurance, children's savings and retirement funds are selling well. These are the products that are relevant to any business or family that is thinking about their financial growth and future.
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?
Petrov: The pension system in Russia does not promise anything comforting to people who are actively working. That is why I am mainly selling the idea of retirement planning and helping clients to create their own pension funds with an insurance company. By creating such a fund using life insurance, a client can also be insured against major risks to loss of income.
Hersch: What regulatory, legislative and business challenges do you face in Russia? How do these challenges affect your practice?
Petrov: Existing legislation does not promote the growth of life insurance as a financial instrument. Tax benefits from the use of life insurance products are insignificant. The state does not provide long-term guarantees on company life insurance products like it does in the banking sector.
Also, life insurance is not well advertised, which is why almost every client prospect needs to have a mini financial literacy course.
Hersch: How are you adapting your practice to meet challenges and grow your business?
Petrov: Success in life insurance sales depends on building trusting relationships with clients and on helping them meet their financial goals. In accordance with these goals, I build personal financial plans for clients and help them follow the plans. Thus, my advice to the client is like a well-tailored suit.
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?
Petrov: I would like to expand the scope of my business by three times. I have been in this business for five years. And I think that next year, "the law of compound interest" as it applies to my relationship with customers will allow me to achieve this result.
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