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Leasing Insurance

Today the share of transactions with the insured property is 96% of the total cost of leasing transactions, and insurance coverage is provided for several kinds of risks. It should be noted that the Federal Law “On Leasing” states that “the insurance business (financial) risk is carried out by mutual agreement and lease agreement not necessarily. ” This is evidenced by the fact that the share of the insurance institution and credit risk does not exceed 3% of the total insured transactions. The reason for this are the high rates for these types of insurance risks – from 3 to 11% of the payments, as well as the lack of a license for insurance against financial risks in a number of insurance companies. Such conditions significantly affect the insurance situation in the leasing market. Increase lease payments due to insurance, making leasing schemes less attractive to the lessee.

Therefore, about 20% of companies have an annual loss of 0.1% to 12% of the cost of leasing portfolio. The complex economic and legal nature of the leasing market predetermines the appearance of complex insurance of the leased asset. More and more insurers are willing to offer for leasing companies specialized insurance product that reflects the specific interests of participants and leasing transactions. Some market operators also offer insurance of political, social and administrative risks. Many insurance companies developed special conditions of insurance payments on leasing transactions in the form of “Rules of voluntary insurance against the risk of default on lease payments.” Thus, the specificity of the market is that insurance companies leasing transactions exclusively insuring the leased asset. Insure non-payment or late payment of lease payments the lessee is economically inexpedient because of high tariffs. Simply lessor refuse to participate in such transaction or to increase the down payment. In extreme cases, leasing companies insure only the first payments, which are an indicator of the client’s solvency. It should also be emphasized insufficient supply by insurance companies offering insurance against financial risks.