Sberbank looks into how Russians save up with endowment policies

Nov 28, 2019
  • Sberbank endowment policyholders’ average savings target is RUB930,000
  • In 2019 clients opt for longer terms of endowment savings policies
  • Women take out endowment savings policies more often, but men save up more

November 28, 2019, Moscow — In 10M19 the clients of Sberbank life insurance, a Sberbank subsidiary, have bought about 160,000 new savings endowment policies, which is nearly twice the figure of 10M18. Most of those policies mature in six to ten years, while the average amount policyholders expect to save standing at RUB930,000. Moscow and Moscow Region are the undisputed leaders in terms of the number of policies taken out, accounting for over a fourth of all policies.

Most Russians (62% of all clients) seek to save up to RUB1 mln with their endowment policies. As much as 12% sign contracts for RUB1 mln to RUB1.5 mln, 21% of clients aim for RUB1.5 mln to RUB3 mln, and 5% of them have policies exceeding RUB3 mln. The biggest amount a Sberbank client expects to save up with an endowment policy taken out year-to-date is RUB130 mln.

As years go by Russians tend to save up more with their endowment policies. People under 25 expect to save an average of RUB700,000, those between 26 and 35 would like to have RUB800,000, while with the 36–45 and 46–55 age groups the metric stands at approximately RUB1 mln.

Customers over 56 have the highest figure of all, with their life insurance endowment policies targeting an average of RUB1.1 mln. This age group saw the average savings figure climb about 20%. In 2018 the average insurance coverage on endowment policies taken out by 56+ customers was about RUB900,000.

The savings amount targeted by people under 25 slid to RUB700,000 from RUB900,000, whereas the total number of contracts signed by the said age group nearly quadrupled to 8,000+ endowment policies. In other age groups the savings target stayed almost flat compared to 2018.

Most of the contracts – about 30% of all policies – were signed by people aged 36 to 45. Customers under 35 took out 28% of all policies. The 46–55 age group signed 23% of contracts, while 19% of policies accounted for 56+ people.

The year 2019 has seen more long-term savings endowment policies. The majority of these – 42% in 2019 against 35% in 2018 – were signed for six to ten years. The proportion of 11–15-year policies grew to 22% from 14%; 16–20-year contracts grew to 10% from 9%; policies maturing in 20 and 20+ years registered an 8% increase from 4%. The number of contracts signed for under 5 years slipped to 18% in 2019 from 38% in 2018.

Women use savings endowment programs more often, having concluded 61% of the total number of contracts. Men, however, sign bigger contracts: the average endowment policy value for men is about RUB1.3 mln, which is 70% more than the average amount of savings under contracts signed by women.

Moscow region is the unrivaled leader by the number of savings endowment policies. In 10M19 local residents signed nearly 45,000 contracts, which is over a fourth of all policies. The average amount Moscow region residents are set to save up is RUB1.9 mln.

St. Petersburg ranks second. In St. Petersburg and Leningrad Region 5,400 savings endowment contracts were signed and their average savings target is RUB1.6 mln.

Krasnodar Territory residents took out 5,300 savings endowment policies, with the average insurance sum of RUB690,000.

In Samara Region the number of new endowment policies stood at 3,400, with the average coverage of RUB720,000. In Khanty-Mansi Autonomous District 3,100 new endowment policies were taken out, with the average value of UB740,000.

Olga Monakhova, Executive Director of Investments and Savings, Sberbank,

“Year-to-date savings endowment policies are the fastest growing life insurance policies in terms of the size of premiums and the number of contracts signed. On the back of stock market volatility people are increasingly opting for products that let them protect their money, save up for something, and build up financial reserves, rather than multiply or invest their capital. Savings endowment is perfect for that, and it fully insures policyholders for the entire insurance term, too.

Meeting our clients’ demands, we’re always improving our savings life insurance product range. For instance, in 2018 we successfully launched Ticket to Future, a product that helps you save up for your child’s education, while in 2019 we’ve rolled out our Future Capital, a somewhat similar product enabling customers to save up for anything. We’re going to launch a number of new products shortly to make our solutions more targeted to meet an array of protection and savings requests.”

 

Appendix

Top 15 regions by the number of new savings endowment policies in 10M19

No.

Region of Russia

Number of policies

Average coverage, thousand rubles

1

Moscow and Moscow Region

44,900

1,900

2

Saint Petersburg and Leningrad Region

5,414

1,600

3

Krasnodar Territory

5,250

690

4

Samara Region

3,425

720

5

Khanty-Mansi Autonomous District – Yugra

3,128

740

6

Rostov Region

3,097

500

7

Krasnoyarsk Territory

2,824

530

8

Irkutsk Region

2,632

420

9

Sverdlovsk Region

2,428

670

10

Bashkortostan Republic

2,297

650

11

Voronezh Region

2,227

600

12

Perm Territory

2,225

740

13

Stavropol Territory

2,185

450

14

Belgorod Region

2,139

480

15

Kemerovo Territory

2,094

540