Live souls

作为俄罗斯领先的西方投资者之一，Boris Jordan在过去的15年里经历了大量的UPS和拖延。但很少，他在讨论他的最新项目时，他是否因为他在讨论他的最新项目时出汗而热情：向该国的臭名昭着的不信任和宿命论消费者销售人寿保险。

Renaissance Life Insurance, Jordan's newest company, began writing its first life policies in April. Over the next 18 months, the company plans to train 2,500 agents in ten Russian cities in the art of selling term life insurance, and to introduce the public to the joys of telemarketing and actuarial tables.

"What I like about insurance is that it's very scalable," Jordan says in an interview at the offices of his investment company, Sputnik Group, in a new glass tower in central Moscow. "I don't want to sell this business until I build a company with $1 billion in revenues. I expect that in five to ten years."

Such volumes are modest by European standards, Western or Eastern. For Russia, however, where annual life insurance premiums total, at most, $200 million a year and cultural factors have inhibited the industry, such growth would represent nothing less than a revolution.

Jordan isn't the only one who senses an opportunity. Several big insurers have profited from the explosive growth of Russia's property/casualty insurance market, where premium revenue rose by 36 percent in 2004, to more than 70 billion rubles ($2.5 billion), according to the American Chamber of Commerce in Russia.

现在，这些球员正在投注人寿保险是有望的类似起飞。德国大型保险公司Allianz购买了45％的ROSNO保险公司，2001年为3000万美元。在观看他们的P / C收入后，每年增长40％，伴侣去年9月推出了一家专门的生活保险公司Allianz Rosno Life。该公司计划以类似于文艺复兴的速度扩展，明年将在地上有2,000名代理商。

"This is the most exciting place in the world for insurance," raves Hannes Chopra, the German executive who is chairman of Allianz Rosno Life. "The business is growing faster than in China, and it's more profitable than in India."

美国国际集团,另一个活跃foreign insurer in Russia, has been selling life policies there since 1997. The company doesn't disclose its results, but Jordan estimates that AIG's Russian business had revenues of about $60 million last year.

Domestic players also are turning their attention to the nascent life business. Russia's biggest insurer is Rosgosstrakh, a Soviet-era monopoly -- reminiscent of Sberbank in the banking sector -- whose name means Russian State Insurance. The government sold 75 percent of Rosgosstrakh for $63 million to Ruben Vardanian, CEO of Moscow investment bank Troika Dialog, in a two-stage privatization in 2001 and 2003; it retains a 25 percent blocking stake that enables it to veto acquisitions, mergers or share issues.

Armed with 60,000 agents nationwide, Rosgosstrakh seeks to exploit widespread consumer mistrust of entrepreneurs by advertising itself as a "company with a state mentality" and using the double-headed eagle of imperial Russia in its logo. The company's revenue from premiums quadrupled between 2002 and 2004, to 33 billion rubles, as it took 36 percent of the fast-growing market for auto insurance that sprang up after Russia began requiring drivers to obtain coverage in 2003. The company's life insurance offerings so far focus on burial policies, where a few rubles a month cover the immediate costs of leaving this world. Even so, rivals are wary of Rosgosstrakh's latent power. "We consider Rosgosstrakh and AIG our chief competitors in life insurance," says Allianz Rosno's Chopra.

俄罗斯的金融工业寡头在过去几年中增加了在保险中的存在，现在也在关注生活业务。莫斯科的保险公司主编Vitaly Bogdanov认为三家企业 - Alfa集团，基地元素和Uralsib金融公司

Mikhail Fridman's Alfa Group owns Alfa Strakhovanie, which already covers commercial risk at big Russian companies ranging from oil pipeline operator Transneft to the national airline, Aeroflot. Base Element, the holding company controlled by aluminum king Oleg Deripaska, bought up Ingosstrakh Insurance Co., a state insurer that covered Soviet property abroad, in 2001.

"I see Ingosstrakh as really the jewel of our group," says David Geovanis, an American businessman who heads strategic development for Base Element. That's quite a claim, considering that the group's Rusal is the world's No. 3 producer of aluminum. Finally, UralSib, the financial group controlled by Lukoil CEO Vagit Alekperov, is trying to leverage its position as Russia's 11th-biggest bank to grab a share of the insurance market.

"There's a general feeling that we're on the threshold of a life insurance boom," says the Insurance News Agency's Bogdanov. "Property insurance has been developing gradually for ten years, mostly for corporates. Now the focus is shifting to individuals."

Chopra和Jordan认为俄罗斯人寿保险是世界金融中最富有的尚未开发的市场之一。毕竟，俄罗斯享有迅速增长的经济，拥有约14300万良好教育的消费者和每人约2,800美元的GDP，类似于土耳其和巴西。根据国际货币基金组织的统计，今年该国的经济产出预计将增长6％，略微从前两年的速度7％的速度下降。最重要的是，国家社会安全网可忽略不计，为消费者提供了强烈的激励，为其家庭提供退休和财务安全。

然而,由于历史原因,私人提供the future is almost nonexistent. The average Russian spends $40 a year on insurance, compared with $4,000 for a Western European consumer, says Erhard Joerchel, who runs Allianz's nonlife business in Russia. His colleague Chopra estimates that Russian life insurance premiums total no more than $120 million a year, compared with $8 billion to $9 billion in Poland, which has less than one third of Russia's population. Although private insurance survived in some form during the communist era in Poland and other former Soviet satellite states, Russians looked almost exclusively to the state for social guarantees.

Would-be insurance barons hoping to conquer Russia face plenty of other obstacles. A big one is the deeply ingrained attitude of fatalism and superstition. Even educated Russians are prone to a vestigial peasant conviction that preparing for one's own death will only hasten it.

"I remember chatting to this babushka about life insurance, and her answer was, 'Don't give me the evil eye, you son of a bitch,'" recalls Paul Goncharoff, an American of Russian descent who started AIG's life business and recently launched an estate management unit for Allianz Rosno Life.

Everyday violence in modern Russia is another potential impediment to insurance sales, says Richard Karpovicz, chief executive of Renaissance Life. "I met a young, university-educated woman in Moscow recently who told me, 'If somebody finds out I have a life insurance policy, they will kill me,'" he relates.

Some observers, including Ilya Lomakin-Rumyantsev, director of the Federal Insurance Supervision Service, Russia's insurance regulator, argue that the country is simply too poor to support a large-scale life business. "The experience of other countries shows that the insurance market takes off once monthly income passes $300 per person," says Lomakin-Rumyantsev in an interview at the agency's headquarters, off of Red Square. "Russia's is still closer to $200."

All these reasons explain why for every Allianz or AIG that has come to Moscow there is an ING Group or Metropolitan Life Insurance Co. that has expanded aggressively in Eastern Europe but so far has declined to dip a toe into the Russian market.

Beyond the statistics lies an intangible calculation: How quickly, if at all, is Russia converging politically, culturally and commercially with the rest of Europe and the West? Making monthly life insurance payments is ultimately an expression of faith in social stability and the predictability of law, even beyond the grave. Such pillars of trust remain wobbly in post-Soviet Russia.

Recent actions by President Vladimir Putin and the government have done little to build public confidence in the rule of law. Putin's summary abolition of gubernatorial elections, the dismemberment of Yukos Oil Co. on the basis of dubious back-tax claims and continued retroactive tax assessments against top companies such as oil producer TNK-BP have raised fears that the country is reverting to authoritarian and arbitrary government.

Those worries notwithstanding, Jordan and other insurance executives see a country with millions of ordinary people quietly learning how to think for themselves and plan for their families' futures in distinctly non-Soviet ways. An emerging middle class of at least 15 million Russian consumers is rapidly adopting the habits and products that are commonplace in Western financial markets. Bank deposits have increased by some 25 percent over the past year, according to the Central Bank of the Russian Federation, and consumer credit jumped by 39 percent in the 12 months ended March 31. Each day more than 100 Russian families take out a mortgage loan, according to the Organisation for Economic Co-operation and Development, which cites official government figures. Each of them needs a life insurance policy to get the loan.

"If you assume that even 10 percent of the Russian population has the income and mind-set for life insurance, that's still a market too humongous to be worried about competition," notes Karpovicz, who before joining Renaissance Life led the rise of the U.K.'s Commercial Union, now part of Aviva, which became Poland's top life insurer during his tenure.

Karpovicz also says that the wealthiest 10 to 15 percent of Russians live in a demographically separate world from the nation at large, which has seen a catastrophic drop in life expectancy since the end of communism, to a mere 61 years for men and 74 for women. "Our premium rates are based on the general population," he explains. "But the urban middle class has lower rates of alcoholism, fewer freak accidents and access to better health care, so in fact their life expectancy is much longer."

Allianz的Joerchel在莫斯科住了十年，在首都街道上看到了人们的生活迹象 - 欢迎逆转出生的干旱，从1991年开始削减俄罗斯人口约400万。“在你最长的时间几乎没有看到莫斯科的孩子，“他联系起来。“现在突然间，有婴儿推车。人们感到足够安全，可以让婴儿身上，并且将反映在保险中。”

Jordan, meanwhile, contends that Russia's business and regulatory climate has improved under Putin, the Yukos affair notwithstanding. The state, which oligarchs manipulated in the 1990s to help them amass their empires through single-bidder privatizations, is becoming a more fair-handed referee, he says. "These days in Russia it's possible to compete based on your skill set, not on who you know or who your competition knows or who can destroy you," he asserts.

海崖,纽约当地的俄罗斯帝国heritage, Jordan, 39, has been getting excited and thinking big about Russia since the collapse of communism in 1991, with mixed results. He started the first Western investment banking operation in Moscow that year, for Credit Suisse First Boston; in 1995 he created Renaissance Capital, one of the top Russian financial houses. As a private equity investor, he has backed winners ranging from steelmaker Novolipetsk Metals Combine to upscale culture magazine Afisha.

In the minus column Jordan helped talk George Soros into a deal that the famed hedge fund inves-tor has called the worst investment of his life: paying $1.9 billion for 25 percent of Russian state telecommunications holding company Svyazinvest in 1997. Soros and his partners unloaded the stake for a reported $625 million last year. Jordan also controlled oil company Sidanco in partnership with Norilsk Nickel oligarch Vladimir Potanin in the late 1990s when Sidanco diluted minority shareholders' stakes and then crashed into bankruptcy after Russia's August 1998 default and banking crisis. Jordan came out of the investment well, however, selling his 40 percent stake in Sidanco to Tyumen Oil Co. for $600 million in 2001. The company is now part of Anglo-Russian joint venture TNK-BP.

Jordan founded Renaissance In-surance as an offshoot of Renaissance Capital to sell p/c policies in 1997. (The two are not linked today; Jordan left the bank after the 1998 financial crisis.) He planned to enter the life insurance business then, but the events of 1998 altered those plans, too.

Memories of those dark days have long since faded: Renaissance Life plans to sell hundreds of thousands of policies in 20 Russian cities when its network is fully established three years from now. The firm made its first sale in early April, a 1.3 million-ruble term life policy for a Moscow public relations executive. The annual premium of 28,000 rubles, or about $1,000, is steep by Western standards for a healthy 34-year-old man, but the potential payout is relatively rich, equaling more than five years' earnings at the average Moscow salary of about 20,000 rubles a month, Karpovicz notes. Another new client is paying 56,000 rubles annually into a 20-year endowment life policy.

The road to a $1 billion-a-year business is long at those rates, but Jordan vows to get there quickly by training thousands of agents. He is contemptuous of Vardanian's army of 60,000 at Rosgosstrakh. "I wouldn't have paid for that infrastructure of old ladies who don't know how to sell modern policies," he says.

Jordan's optimism about the potential for life insurance in Russia is shared by his partner, the European Bank for Reconstruction and Development, which has invested $11 million for 30 percent of Renaissance Life. (Jordan's private investment group, Sputnik, controls the rest.) "From our experience in Central and Eastern Europe, we judged that now is the right time for this business to take off in Russia," says Jonathan Woollett, director for nonbank financial institutions at the London-based EBRD. "We would consider other insurance investments as well."

Russia's budding life business has come a long way from the industry's post-Soviet origins. During the 1990s any factory or trading company could start its own insurance company, at least on paper. Fully 3,500 did so, frequently as a means of obscuring their finances and evading taxes. Almost 1,300 of these entities remain in business: That's about the same as the number of Russian banks, which also proliferated in a weak regulatory environment. The FISS's Lomakin-Rumyantsev, who commands an over- sight staff of just 300, says the number of genuine insurance companies is between 400 and 800.

Insurers experienced a boom in so-called life policies during Putin's first term, with premiums reaching some 150 billion rubles in 2002, according to the Russian Ministry of Finance. But 97 percent of these were thinly disguised tax-evasion schemes rather than bona fide life products, according to a Rosgosstrakh study. Employers paid salaries into tax-exempt "insurance" accounts, which employees duly emptied at the end of the month. The Duma closed this revenue loophole in late 2002, and Lomakin-Rumyantsev notes that life premiums have dropped since then. The popularity of such dodgy schemes makes it difficult to calculate the size of the actual life business.

Other past practices were more sinister than tax evasion. Former AIG executive Goncharoff recalls dealing with attempts at fraud: "Shortly after we started selling life insurance, we noticed an unusually high number of claims for infant deaths." He also recalls that a steady stream of customers approached AIG wanting to buy third-party policies -- legal in Russia -- on their business partners. The company refused, reasoning that the risk of murder was too high, given that contract killings could be arranged for an average of $5,000.

By and large, though, insurance remained a relative backwater during the '90s. The budding oligarch class, busy building banks and using them to acquire the state's industrial holdings, for the most part ignored the business until after the 1998 crash. The average citizen barely knew that insurance existed.

监管机Lomakin-Rumyantsev表示，市场的不发达是现在优势，因为它意味着人寿保险没有失败的方式，银行业的失败。1998年8月，当俄罗斯大多数商业银行被政府违约的违约和随后的卢布崩溃遭受时，这不是一个保险公司破产。

对外国投资者来说,保险提供了一个更好的regulatory regime than does the banking sector because of Russia's eagerness to join the World Trade Organization later this decade. The European Union persuaded Moscow to abolish restrictions on EU insurers operating in the country before it agreed to support Russia's WTO application last year, though the insurers are still subject to an overall ceiling on foreign firms of 15 percent of the Russian insurance industry's charter capital. Foreign-owned banks are limited to 12 percent of the system's capital and face a welter of red tape, such as a requirement that they set up Russian-domiciled subsidiaries rather than just open branches.

The state also has been helping the industry in other ways. In July 2003 the government made liability coverage mandatory for automobile owners, effectively introducing the nation's 25 million drivers to the basic concepts of insurance. Rosgosstrakh has taken a commanding position in the nascent auto market. AIG, Allianz and Renaissance have stayed away because of stringent regulation, which limits premiums to about $150 a year. The foreign companies fear that may not be enough to cover claims. But they welcome the law because it has raised the visibility of insurance to middle-class consumers.

Elena Kulyasova, one of Russia's growing legion of insurance agents, can testify to the country's changed attitude toward life insurance. A construction engineer by training, Kulyasova moved with her husband to the Moscow area in the late 1980s, but the couple found themselves out of work for most of the 1990s. She finally landed a job in 1998 with Military Insurance Co., a former state entity created to serve the Soviet Army.

Kulyasova spent her first five years in the business sitting on a bench outside the French Embassy for up to ten hours a day, selling travelers' health policies, which the French government requires of Russian visitors. She still has that job, but now she spends her evenings driving to potential car insurance clients, trying to persuade them they would be in better hands with Military Insurance than with Rosgosstrakh. She declines to give her income, but she is the main provider for her family of three children and drives a late-model Volkswagen.

A rival from Ingosstrakh was recently taken off duty outside the embassy and put into a company training program for life insurance agents. Kulyasova says she would like to follow a similar path because of the bright promise of the life business.

"You can feel that it's gotten a bit easier now for people to live," she notes. "They're not struggling so much to put bread on the table. They have something, so they can start to think about protecting it."

Jordan, and Russia's other ambitious insurance executives, are only too happy to oblige them.