Mikhayil Manchurak
“BIN Insurance”, Director General
Availability of insurance contract on the subject of pledge on loan in an insurance company having a high rating of reliance reduces the risks of the creditor-bank. This factor should be considered by banks during the assessment of quality of securing on loan and, consequently, lower the allocations to reserves regarding possible losses.
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Andrey Maltsev
Deputy CEO, Norde Bank
This type of additional insurance might be worth implementing for assets with risks having higher levels (eg: for big loans with low initial deposits or without deposits, collateral loans, etc.). Several banks which run flexible crediting policies and provide the mentioned types of mortgage loans do already use the mentioned insurance product. The rates on such loans, as a rule, are higher than the basic rates, which the creditor offers for standard conditions of crediting (full portfolio of documentation, presence of liquidity collateral and max LTV in the volume of 80%).
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Evgeniya Samardak
MDM Bank, Head of Retail Business Department
The form in which the insurance of financial risks is currently introduced does not contain any attractiveness or sufficient reduction of loan risk for the bank since the difference between the price of the apartment by the moment of granting the loan and by the moment of debitor’s default is insured only.
Nevertheless, in perspective it is worth mentioning the positive influence on the risk reduction both for the clients and the banks. The thing is that debitors, who do not have the initial sum of the deposit but are eager to solve their housing problem as quick as possible, very often are forced to apply to the not quite fair methods from the point of view of the bank: - before signing a mortgage contract they manage to receive a consumer loan in another bank to pay the initial deposit by thus not only rising the risk of default of the loan but also their personal financial load. The development of insurance liability mechanisms in its essence enables to purchase lowering of initial deposit on “legal” and safe grounds. Whereas the expenses are quite comparable or even less as compared with taking the expensive consumer loan just before the mortgage deal. Moreover, “the legal” mechanisms of receiving a loan with minimal initial deposit free the banks from the need of making additional checkups and thus enable to be more loyal and comfortable for clients and be capable of lowering their operations costs.
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