IPO "Renaissance Insurance": an insurer will appear on the Moscow Exchange

IPO «Renaissance Insurance»: an insurer will appear on the Moscow Exchange

20 October, the first representative of the insurance industry plans to hold an IPO on the Moscow Exchange - the company "Renaissance Insurance". The group includes companies directly related to insurance, and those involved in related fields: asset management and medical business.

About company

Renaissance Insurance (MCX: KIDNEYS) — a large universal insurance company. Ведет деятельность только в России. Company 82 office in 27 regions of the country. The number of clients exceeds 3.5 million. More recently, the group of companies included a non-state pension fund., но в июле 2021 года его продали. Renaissance Insurance identifies three operating business segments.

Life insurance. В этот сегмент входит накопительное, investment, кредитное и рисковое страхование жизни. At the end of 2020, more than half of the insurance portfolio was occupied by investment insurance., but in the first half of 2021, its share fell to 36%, but the share of endowment insurance is stable — 17%. At the end of 2020, Renaissance Insurance occupied 10,7% market and was the largest private company, ranking fourth among all. An important feature of the segment: a significant part of insurance policies is sold through 46 partner banks in the process of issuing loans.

Other types of insurance. This includes property insurance, cargo, cars — casco and CTP, – additional medical insurance (DMS) и другие его виды. The share of auto insurance and VHI is growing, according to the results of the first half of 2021, reaching 58 And 20% respectively. In this market, Renaissance Insurance is a little less successful.: at the end of 2020, the market share was 3,4% and the company took seventh place in the list of the largest insurance companies.

Asset Management. Here, the company manages assets to generate additional income from the placement of money. According to the results of the first half of 2021, assets under the management of the subsidiary Sputnik - Capital Management were estimated at 53 billion rubles, which is approximately 30% from the total assets of Renaissance Insurance.

If you take the entire insurance market, then the company at the end of 2020 takes the eighth place on it with a share 5,5%. At the same time, customers are satisfied with Renaissance Insurance: the company is included in the list of five companies with the highest client rating on the financial marketplace "Compare-ru". This is the only representative of the ten largest Russian insurance companies by market share out of these five., которые представлены на «Сравни-ру».

One of its main achievements "Renaissance Insurance" considers a high level of digitalization of business and even calls itself a digital innovator., осуществившим революцию на российском страховом рынке.

«Ренессанс-страхование» использует искусственный интеллект и технологии Big Data для управления рисками, real-time scoring. For example, the company has launched mobile telematics - in fact, it is a mobile application, evaluating the driver's driving style and offering, based on the collected data, discounts on casco policies. New software interfaces allow you to integrate the company's insurance products into partner ecosystems very quickly – within a few hours –.

Budu application developed — medical service, включающий в себя телемедицину, собственную клинику и средства превентивной диагностики. In the second quarter of 2021, the average monthly audience of the service was estimated at 22 thousand users.. The company calls Budu the buzzword "ecosystem", but agreed to sell 51% the company - the owner of the service "Renaissance-health" one of its shareholders. В итоге Budu получит 850 млн рублей на свое дальнейшее развитие.

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IPO «Renaissance Insurance»: an insurer will appear on the Moscow Exchange

Доля рынка и форма собственности десяти крупнейших страховых компаний России в сегменте страхования жизни в 2020 году

"Savings insurance"24,4%Входит в банковскую группу
"Alpha Insurance"19,6%Входит в банковскую группу
Sogaz17,6%В числе акционеров — крупнейшие госкомпании
Renaissance Insurance10,7%Private
Rosgosstrakh4,5%Входит в банковскую группу
Capital Life4,2%Private
"RSHB-insurance"2,7%Входит в банковскую группу
"Rosbank-insurance"2,2%Входит в банковскую группу
"SiV-life"1,6%Входит в международную страховую группу
Allianz1,3%Входит в международную страховую группу

Доля рынка и форма собственности десяти крупнейших страховых компаний России в сегменте других видов страхования в 2020 году

Sogaz27,1%В числе акционеров — крупнейшие госкомпании
"Alpha Insurance"10,4%Входит в банковскую группу
"RESO-guarantee"10,1%Private, крупный миноритарный пакет акций у международной страховой группы
Ingosstrakh9,8%Private
Rosgosstrakh7,8%Входит в банковскую группу
"VSK"7,6%Private
Renaissance Insurance3,4%Private
"Agreement"3,1%Private
"Savings insurance"2,0%Входит в банковскую группу
"Tinkoff Insurance"1,7%Входит в банковскую группу

Market share and ownership of the ten largest insurance companies in Russia in 2020

Sogaz24,4%В числе акционеров — крупнейшие госкомпании
"Alpha Insurance"13,0%Входит в банковскую группу
"Savings insurance"8,3%Входит в банковскую группу
Ingosstrakh7,4%Private
"RESO-guarantee"7,3%Private, крупный миноритарный пакет акций у международной страховой группы
Rosgosstrakh6,8%Входит в банковскую группу
"VSK"5,8%Private
Renaissance Insurance5,5%Private
"Agreement"2,5%Private
"RSHB-insurance"1,4%Входит в банковскую группу

Structure of the company's insurance portfolio in the life insurance segment in 2020-2021

20201п2021
Investment54%36%
Cumulative17%17%
Кредитное и рисковое29%47%

Structure of the company's insurance portfolio in the segment of other types of insurance in 2020-2021

20201п2021
Auto insurance57%58%
DMS17%20%
Other26%22%

Подробная структура страхового портфеля компании в сегменте других видов страхования в 2020 году

CASCO32,4%
OSAGO19,3%
DMS18,0%
Cargo insurance8,9%
Страхование от несчастных случаев5,5%
Property insurance5,0%
Other10,9%

32,4%

Financial indicators

У компании стабильно растет объем собранных страховых премий, and growing faster than the market. Net profit until 2020 also grew, but for the first half of 2021 decreased slightly. For that., among other things, influenced by exchange rate differences: in 2020, there was a profit on this item, and in 2021 — loss. Capital and debt are also growing..

In the announcement of the IPO parameters, the company provides a coefficient of administrative costs, net profit ratio and return on capital as key performance indicators. The first two indicators increased in 2019 compared to 2018, and in a difficult 2020 expectedly fell. But the return on material capital is constantly falling..

The life insurance segment brings about 56% volume of collected insurance premiums, other types of insurance — 44%.

Amount of collected insurance premiums, net profit, capital and debt of the company by year, billion rubles

Amount of collected insurance premiumsNet profitCapitalDuty
201742,21,420,02,7
201870,33,421,62,5
201971,74,125,64,0
202082,84,730,23,8
1п202147,71,331,66,7

Administrative Cost Ratio, net profit ratio and return on material capital of the company by year

Administrative Cost RatioNet profit ratioReturn on tangible capital
20189,3%4,8%34,8%
20199,4%5,8%31,5%
20208,5%5,7%25,9%

Dividends and dividend policy

У компании есть небольшая история выплаты дивидендов: in 2018, they were paid in the amount of about a billion rubles. После этого компания не объявляла и не выплачивала дивиденды, since it was spent on its development.

According to dividend policy, dividends are planned to be paid once a year in the amount of 50% net income under IFRS, but with a caveat that, что при расчете дивидендов будут учитываться потребности компании в деньгах для инвестиций, deals M&A and the regulator's capital adequacy requirements.

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History and share capital

Компанию основали как негосударственный пенсионный фонд в 1993 году, а в 1997 реорганизовали в страховую компанию. Own medical subsidiary was established in 1998, and in 2004 a joint life insurance company with the EBRD was established. «Ренессанс-страхование» вошло в десятку крупнейших российских страховщиков в 2008 году. In 2017, the company merged the insurance business with NPF Blagosostoyanie with the participation of the Baring Vostok fund. In May 2021, it became known, что НПФ «Благосостояние» продало свой пакет акций компании структурам Романа Абрамовича и его многолетних партнеров.

The controlling stake in Renaissance Insurance belongs to the structures, the main beneficiary of which is the president and chairman of the board of directors of the company Boris Jordan. Nearly 29% shares of Roman Abramovich and his partners, more 12% - Baring Vostok Foundation.

Share capital structure of the company before IPO

Beneficiariesshare
Renaissance Insurance Holding LLCBoris Jordan, Mary Louise Ferrier, Дмитрий Бакатин и Сергей Рябцов52,12%
Sputnik Management Services LimitedBoris Jordan, Mary Louise Ferrier, Дмитрий Бакатин и Сергей Рябцов7,16%
Notivia LimiedBaring Vostok12,08%
Centimus InvestmentsRoman Abramovich9,99%
Laypine LimitedAlexander Abramov9,55%
BladeglowAlexander Frolov4,77%
Andrey GorodilovAndrey Gorodilov4,33%

IPO scheme

"Renaissance Insurance" announced the indicative range of the share price as 120-135 P, что предполагает размер капитализации компании в диапазоне 67,2—73,3 млрд рублей. Shares will be sold as existing shareholders, so is the company itself, which for these purposes will issue new shares. The volume of shareholders' supply is up to 7.2 billion rubles, companies — up to 18 billion rubles.

Besides, existing shareholders will provide option Stabilization Manager, who can fulfill it, selling additionally up to 10% from the volume of supply. Also, the company and the selling shareholders have assumed obligations to, что не будут продавать акции в течение 180 дней после IPO.

The company plans to use the proceeds to invest in the business, в том числе в цифровизацию, and possible transactions M&A.

Why stocks may go up after an IPO

A growing company in a growing sector. In the information memorandum, Renaissance Insurance refers to the KPMG study, согласно которому российский страховой рынок с 2020 по 2024 год будет расти с совокупным среднегодовым темпом роста (CAGR) 11%. At the same time, the company itself for the period from 2017 to 2020 grew faster than competitors.: with CAGR 17 against 11% the market as a whole and 9% on average the other ten largest players in the market. Based on the results of 1 Half of 2021 Renaissance Insurance continues to grow faster than the market. Besides, the average return on capital over the past two years is 29%, в то время как у конкурентов — в среднем 19%. Well, the growth of business indicators is the main fundamental reason for the growth of the company's stock prices..

And if the business grows faster than the market, Renaissance Insurance will also be able to pay dividends., this will further increase its attractiveness among investors. Truth, dividend yield is unlikely to be as interesting: even if the company manages to repeat the net profit for 2020 and it will be estimated at the lower limit of the placement, то при соблюдении дивидендной политики может получиться около 3,5%. Доходность может быть и ниже, but, On the other hand, "Renaissance Insurance" should not be considered as a purely dividend story: yet it's more of a growth story.

Также некоторым позитивным фактором можно считать недавнее вхождение в капитал компании такого известного и бывалого бизнесмена, like Roman Abramovich, и его партнеров: one can assume, that they also believe in the company's bright prospects., раз инвестировали в нее.

Digitization. "Renaissance Insurance" in materials for investors positions itself as an innovative player, who managed to successfully introduce very fashionable information technologies into such a long-existing and conservative sphere of activity, as insurance. Furthermore, the company approves, that it's not just a tribute to fashion, and that digitalization really makes her business more efficient.. Maybe, such positioning will help the company attract investors, любящих все модное и современное.

Pioneer of the sector on the stock exchange. Компания первой из страховщиков выйдет на Московскую биржу, what can cause an influx of investors, who simply want to invest in this sector of the economy to diversify their portfolio.

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Why stocks may fall after an IPO

The situation in the sector is mixed.. Yes, the company is among the ten largest players in the insurance market, но доля эта невелика, at the same time, a significant part of competitors or is part of large banking groups - including state-owned, — or is listed as subdivisions of large international insurance companies.

Seems, что у них есть больше финансовых и прочих ресурсов для своего развития. In my opinion, hard to expect, that Renaissance Insurance will be included in the foreseeable future, for example, in the top three largest players in the insurance market.

Besides, the company plans to increase market share through M transactions&A, but it is worth noting, что рынок и так уже в достаточной мере консолидирован: на долю 10 the largest players have to 82,4% from him, basically, for the company, the life insurance segment is even more - as much as 88,8%.

Business conditions may worsen. Как мы уже упоминали, the company earns most of the money on life insurance, but with this segment you can expect several problems at once:

  1. ЦБ РФ начал активно поднимать ключевую ставку, what makes loans more expensive and, respectively, less attractive. And this is one of the main sales channels for life insurance policies..
  2. Поднятие ключевой ставки — это причина постепенного поднятия ставок по вкладам в банках, что сделает их более привлекательными и может уменьшить популярность инвестиционного страхования жизни.
  3. In the review of the activities of insurance companies, the Central Bank of the Russian Federation mentions, that after 2018, the interest of the population in investment life insurance began to weaken. He attributes this to his regulatory actions to raise awareness of the essence of the product., so it is with that, that he brought his customers low profitability: ended in 2 In the quarter of 2021, three- and five-year policies on average brought only 4,6 And 4,4% annual respectively.
  4. The boom of recent years in the Russian stock market may also contribute to an increase in the percentage of people., who will invest on their own – not through insurance products – for potential higher returns, чем по банковским вкладам.

The ambiguity of the absence of public competitors. Как мы рассмотрели выше, the absence of public competitors in the sector can play positively on stock prices, but there may be negative effects. Поскольку напрямую сравнивать компанию не с кем, harder to assess, is it expensive or cheap. For example, if you try to calculate the multipliers of "Renaissance Insurance" according to the data of 2020, then P / E taking into account the price range, the IPO will be in the region of 14-16, а ROE — около 16%. If you count from data 1 half of 2021, where the net profit is lower, and allow, that the same will be in the second half of the year, the values ​​of the multipliers will turn out even worse.

Maybe, кто-то не захочет вкладываться в сектор, так как в нем совершенно нет альтернатив.

IPO «Renaissance Insurance»: an insurer will appear on the Moscow Exchange

Number of clients on brokerage services in Russia by year, million people

20182,2
20194,3
20209,9
1п202114,9

2,2

Forecasted multiples of the company

P / EROE
According to 202014,3—15,615,6%
According to 1p202125,8—28,28,2%

Eventually

У «Ренессанс-страхования» достаточно диверсифицированный страховой портфель, the main emphasis is on the life insurance segment. The company has achieved great success in digitalization, which help it to increase the efficiency of the core business, expand it and provide medical services.

The company is growing faster than the market and plans to expand further due to organic growth and absorption of competitors. For this, among other things, will use a significant part of the money, привлеченных в ходе IPO.

At the same time, the insurance market in Russia is quite consolidated and its significant share is occupied by the company's competitors., members of large banking and insurance groups, which are not easy to fight. In its turn, life insurance market, according to the forecasts of the Central Bank of the Russian Federation, can wait for hard times.

Another controversial fact: Renaissance Insurance will be the first insurer on the Moscow Exchange. On the one side, this can cause an influx of investors into the company's shares, those wishing to invest in this sector. On the other hand, it makes it difficult to evaluate the company to understand., how expensive its shares are.

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