“Beggarly” payments under OSAGO: how insurers profit from drivers OSAGO insurers do not want to pay Russians for auto parts at real prices 09.29.2023, 17:44

The Russian Association of Automobile Insurers (RUA) has published new reference books on the cost of spare parts, according to which all insurance companies in Russia calculate compensation amounts for compulsory motor third-party liability insurance after accidents.

The average cost of spare parts increased by only 1.4% compared to prices valid on June 19, 2023, the previous guidance revision, according to the documents. Then the price change was also official – the total cost of spare parts augmented increased by 0.9%.

Last summer, insurers even noted a decrease in prices for some items, which, according to the head of the RSA Evgeny Ufimtsev, allowed the union to reduce the cost of spare parts in the guides by 2.5% since June for the most popular cars. Brands in Russia – Hyundai, Kia and Toyota.

real situation

The last more or less noticeable price adjustment took place in March 2023: then the values ​​increased by 19.5% compared to March 2022. However, representatives of independent service stations point out that all these updates to RSA insurance price lists do not correspond to the real situation.

So, Tatyana Ovchinnikova, director of the Fit Service car service network, previously spoke “socialbites.ca” says that prices for auto parts in Russia alone increased by 30-100% depending on location from January last year to March 2023. He emphasized that absolutely all products have become more expensive compared to before the crisis.

The Russian Association of Automotive Services told socialbites.ca that the overall increase in prices for spare parts since the beginning of 2023 (based on analysis of about 300 manufacturers of original and non-original parts) is about 14%.

“Between January and September 2023, wholesale prices increased by an average of 12-14%. There was a special jump when the dollar rose above 100 rubles,” said Ilya Plisov, member of the board of directors of the Automobile Services Association.

At Fit Service, a company that imports automobile components to Russia, convincedHe said that spare parts prices will increase by another 15% by the end of 2023.

Reason for price difference

The Association of Insurers, which adjusted the guides by 1.4% this September, promises to do so again, but by the end of the year the cost of spare parts in the guides may increase from 10% to 20%. individual parts.

“RSA conducts market research, updates the index in strict accordance with the methodology approved by the Bank of Russia, and only after that the new index can be compared with the previous one – as a rule, this is done for a group that breaks down frequently. The union explained that these are the most frequently used parts during the restoration of the car.

RSA assures that motorists do not have enough money due to the fact that OSAGO does not provide repairs only with original spare parts; The average prices in the guides are created taking into account non-original parts, so there may be some discrepancies in the estimates.

The Central Bank told socialbites.ca that the prices in the guide can be revised at least every three months.

When asked about the discrepancy between real market prices and those indicated in the RSA list, the regulator explained that the price dynamics of different manufacturers are different, so the directory data differs from the price tags of sellers.

At the same time, the Central Bank does not carry out real supervision over the calculations of insurance companies: as the regulator’s press service reports, this has been carried out by “consumer rights advocates” since 2022. The bank drew particular attention to the Borrowers’ Rights Fund, which regularly appears in the media with various banking initiatives, exposure of fraudsters’ schemes and appeals to the Central Bank.

Vitaly Knyaginichev, head of the Ingosstrakh retail trading directorate, explained that the data in the RSA reference books are late because their prices were collected almost a quarter before publication. He suggests that the December manual will show the consequences of the fall in the ruble.

It is wrong to compare the price dynamics in the current guides, which are updated quarterly, with the increase in prices for spare parts over a long period since the beginning of 2022, says Pavel Yakovlev, senior product manager for auto insurance at Retail Insurance. RESO-Garantiya department:

“This growth [цен] was associated with a deficiency. Now the filling of the market with spare parts has stabilized, and as a result, prices have actually stabilized, which is reflected in the directories. If earlier it “flew into space” due to the scarcity of prices for rare spare parts, such as headlights on Lexus, now such cases are rare.

More supply channels have emerged. It is also affected by price, logistics and delivery time. You can find parts cheaper, but they will take longer to arrive in Russia. The guides reflect average prices.”

Repairs under compulsory car insurance are unprofitable

Alexander Garankov, development director of the international network of car service centers Fit Service, told socialbites.ca that referrals for repairs under compulsory motor liability insurance are unprofitable for most independent stations.

“We, as the largest network of automobile service centers, work extensively with the segment of insurance companies, so we can compensate for the loss from other areas, but repairs under compulsory motor insurance are also not profitable for us. “This situation is not new this year, it is a long-standing practice,” he said.

The prices that increased the most in August 2023 compared to January were spare parts delivered to order: large unit parts (steering rack assemblies, engines, transmission elements), some body parts and optics.

“In addition, the growth of spare parts for European and American car brands is traditionally more noticeable. So, for example, if the price of many filters for Korean and Japanese cars has fallen, then even the price of their analogues for BMW has increased by 15-20%,” said Ovchinnikova.

Insurers are looking for profit

Anton Shaparin, vice president of the National Automobile Association (NAU), believes insurance companies are using RSA guidelines to reduce payouts to injured drivers as much as possible:

“The RSA Guide has nothing to do with repairing cars with spare parts in general. This is a tool for underestimating payments under compulsory motor insurance and allows insurance companies to cover themselves with some figures. “It was designed to deliberately underestimate the cost and reduce the payment based on that.”

According to Shaparin, if there is no specific spare part in the directory, insurers estimate payments based on the cheapest Chinese analogues. They are now also trying to extract payments based on the prices of used parts from car dismantling plants, which are even cheaper than their Chinese counterparts. The increase in spare parts prices in reference books planned by RSA in December will not change the situation.

“These directories, all the mechanisms of their formation and the principle of making payments need to be completely revised, because if the numbers are so miserable, we will never see repairs in OSAGO,” the expert emphasized.

Sergei Radko, lawyer of the Freedom of Choice automobile movement, stated that payments made under compulsory traffic insurance are almost never enough to repair a car, and garages do not want to buy cars for repair at these prices:

“The prices in the reference books have always been inadequate, increasing by 1.4 percent does not affect anything.

The market is in an unprecedented situation, the exchange rate is rising and problems with the delivery of spare parts remain. “Nothing good is expected in the near future.”