It's not about altruism: banks are increasingly approving loans to Russians without insurance.

In the second quarter of 2025, the number of insurance policies issued to borrowers in Russia dropped significantly. Premiums for life and health insurance, accident and illness insurance, and voluntary medical insurance fell almost in half, to 34.8 billion rubles, according to the Central Bank of the Russian Federation. And in the first six months of this year, their total volume fell by 40% compared to the same period last year. MK spoke with experts to find out whether borrowers can now be confident that they will be issued a loan under the same terms even if they decline insurance.

The "Key" to Credit Insurance

Banks have significantly reduced the volume of borrower insurance. Between April and June 2025, the total amount reached only 34.8 billion rubles. In the first half of the year, it amounted to 76.5 billion rubles, a 40% decrease compared to the same period in 2024. Analysts note that the main reason for the decline in borrower insurance was a decline in mortgage issuance, for which life insurance is usually mandatory. However, tightening of issuance regulations for other types of loans popular with Russians also played a role.

"The overall decline in retail lending itself has impacted the dynamics of credit insurance," says Alexey Volkov, Marketing Director at the National Bureau of Credit Histories (NBCH). "High market interest rates and the Bank of Russia's tight monetary policy are not contributing to increased consumer demand for borrowed funds. Thus, the number of mortgage loans issued in the second quarter of 2025 compared to the same period in 2024 decreased by 50.9%, car loans by 43.5%, and consumer loans by 55.2%."

As a reminder, banks' abuse of insurance, and sometimes even proven instances of foisting insurance on clients, have previously been the subject of scrutiny by both the Central Bank of Russia, which has taken special measures to combat these practices, and human rights activists. For example, the financial regulator's service's report on unacceptable practices for the second quarter contains information about banks selling loan insurance at a significant markup. One example was even cited of one credit and financial institution selling insurance to a client for 490,000 rubles and transferring only 43,000 to the insurance company. Similar situations are observed at other banks, with roughly the same figures. It's not surprising, given these circumstances, that banks have been breaking profit records for years, even under sanctions and other restrictions. But this year, judging by the figures, they have moderated their appetites.

Interestingly, the Central Bank's wards' attitudes toward insurance were influenced by tightened regulation, not in the area of ​​consumer protection, but in the lending sector as a whole. According to Natalia Chelukhina, professor at the Department of Global Financial Markets and Fintech at the Plekhanov Russian University of Economics, analyzing consumer lending trends reveals a clear decline since January 2025, which is explained by the high key rate set in the fourth quarter of 2024. Credit life insurance, as well as accident and health insurance, typically accompany mortgage agreements.

At the beginning of 2025, a number of preferential mortgage lending programs expired, which also impacted insurance premium collection rates. The auto loan market is also experiencing a decline, driven by both the high key rate and the increase in the recycling fee. Life and health insurance are not mandatory for auto loans, unlike comprehensive insurance, but it can impact the loan interest rate. The decline in voluntary health insurance is not related to lending. Its main buyers are corporate clients. With the key rate high, businesses are starting to cut costs, including by reducing the amount of social benefits, explained Chelukhina.

The Unexpected Benefits of Tight Regulation

Human rights activists also say it's too early to assume banks are ready to forego excess profits from selling insurance to clients. "We haven't seen any clear signs that individual banks have changed their policies regarding consumer loan insurance," continues Evgeniya Lazareva, head of the People's Front for Borrowers' Rights project. "But under conditions of monetary policy tightening, banks' portfolios of potential clients are shrinking. There's a risk that loan portfolio growth will be significantly lower than projected. Therefore, banks are unlikely to stop offering insurance with loans, but they are likely not taking advantage of interest rate increases in the event of insurance refusal. This is necessary to prevent clients from leaving." In some cases, banks forego consumer loan insurance in order to retain clients in their portfolio, albeit without the additional profit of insurance fees.

According to Lazareva, it often happens that insurance does not cover the risks faced by the client due to the fact that the bank takes most of the cost as a commission for concluding the insurance contract, which, for consumer loans, can reach 70-80%.

Moreover, banks are now taking less risk by not insuring clients for consumer loans, since, due to the restrictions imposed on lending to borrowers with high debt burdens, the average borrower is quite reliable. They are financially stable and have a high potential for debt discipline, so this is likely another reason why banks can afford to forgo insurance for consumer loans, the human rights activist explained.

Borrowers were divided into classes

Financial experts have noted that the option to obtain a loan without insurance has not been available to all clients. "Banks have begun to differentiate clients by risk and 'premium,' often offering loans without insurance outright," says FreedomFinance Global analyst Vladimir Chernov. "This reduces the pressure to sell additional services and makes them more conscious of their agreement. Plus, some banks don't increase the rate if you cancel your policy, which was previously very rare." Effective January 21, 2024, the "cooling-off period" for canceling voluntary insurance and imposed services has been expanded to 30 days, during which you can return your money and cancel additional options without penalty, formally strengthening the protection. However, one shouldn't relax completely, as the law previously prohibited forced life insurance, but canceling it resulted in higher rates. Therefore, it's important to carefully check contracts and check the boxes when signing up, the analyst emphasized.

Banks are moving away from insurance not out of altruism, but because of demand and regulatory risks. With the key rate at 16.5% per annum, any add-on to a loan hurts conversion, and clients are "disengaging" even when choosing a loan product. Insurance commission margins have become less reliable due to strict sales rules and a long cooling-off period, increasing claims and reputational damage.

As a result, client portfolios are now rigidly divided by risk. "It's easier to offer a strong borrower a pure rate without a policy, while a weaker borrower gets either a policy or a higher rate," Chernov explains the banks' strategy. "Even if the Central Bank relaxes the monetary policy and lending picks up, the market has already shifted to purer sales. I don't expect a return to the old 'default insurance'; the recovery will be partial, primarily driven by the mortgage segment."

In the short term, Russians' wallets benefit from the current market situation. Citizens enjoy transparency in terms of cooperation with the bank and the loan price, since the fewer imposed options, the lower the overall cost. In the long term, it's important to remember that insurance covers rare but expensive risks of disability and death. If the debt is small, income is stable, and there is a financial cushion, then refusing insurance is logical. "In any case, take advantage of the 30-day cooling-off period to calmly compare terms and, if necessary, return the imposed service," the expert recommends.