Boris Jordan: “I don’t know anyone who doesn’t buy comprehensive insurance. Jordan Boris Alekseevich - What was wrong with assets before
Material from CompromatWiki
Biography EducationIn the summer of 1997, Renaissance-Capital and IFC began to merge under the general leadership of Jordan into the investment bank IFC-Renaissance.
In January 1998, the structure was supposed to be formalized legally, but work on the merger continued in 1998, without ending with an actual merger.
In 1999, Jordan became president and chairman of the board of the industrial holding Sputnik Group Ltd.
In 1995-1997, Jordan was an expert for many printed publications on the state of the Russian stock market.
Compromising evidenceNote that Jordan the grandfather and his German fourth cousin Ewald (to whom Jordan the grandfather refers) “could not establish anything,” but Jordan the grandson established: “among my ancestors there are also crusaders.”
He is echoed by a Jordanian worshiper from the Profile magazine, citing the name of her grandfather-minister in full:
Very interesting! Stolypin headed the Russian government in 1906-1911. Let's take an extract from the list of ministers of public education of those years:
Where is Jordan Boris Mikhailovich?
And here’s what Jordan said about his mother and his mother’s ancestors (as retold by another Jordan-worshipper):
Or directly in the words of B.A. Jordan:
"...among the ancestors of my mother - she is from the Shishkov family - there is no one [...]. The most famous of the Shishkovs is Admiral Alexander Shishkov, who was the Minister of Education under Alexander I, the President of the Russian Academy. Pushkin wrote many epigrams to him ". ("Rossiyskaya Gazeta", 08/17/1999).
This misconception about its origins from Admiral A.S. Shishkov (famous for the fact that he proposed replacing the word “boulevard” with “promenade”, “dandy” with “good-looking”, and “galoshes” with “wet treads”) has also found its way into reference books. In particular, if you look at the biography of Yordan Boris Alekseevich in the well-known “Labyrinth” database - in the January 2001 version, then it says about him:
However, in the later (mid-February 2002) version of the same “Labyrinth”, neither Stolypin’s Minister of Education (even with a question mark) nor Admiral Shishkov with his “cast-iron” censorship regulations are no longer in the certificate for Jordan.
According to Vladimir Pribylovsky, editor of the biography of Jordan B.A. in the hypertext information storage system “Labyrinth” (as well as in the “Prosopograph” database), he removed from the latest versions of both these information systems a number of information that turned out to be unreliable and completely unreliable, which got there from interviews with Jordan and laudatory articles about Jordan.
In particular, according to V. Pribylovsky, Jordan's American maternal grandfather Alexander Shishkov could not possibly have been a descendant of the Russian admiral Alexander Semenovich Shishkov, since the admiral had no children.
(Which is confirmed, in particular, by the website “All-Russian Family Tree”: “Shishkov Alexander Semenovich 1754-1841. Writer. Admiral. [...] First wife Sheltig Daria Osipovna (died in 1825). Second wife Lobarzhevskaya Yulia Osipovna, née Narbut. There were no children." (http://www.vgd.ru/SH/shishkov.htm).
In S. Volkov’s card index of more than 200 thousand Russian officers (the Dictionary of Participants in the White Movement, which is being prepared for publication), there is no “captain of the first rank Alexander Shishkov.” Moreover, it is impossible to find naval officer Alexander Shishkov in the registers of Russian naval officers of 1910-1917.
S. Volkov is the most knowledgeable specialist, but not the only one.
The martyrology is organized alphabetically. Let's look at the letter Sh:
Now about the relationship with the Georgian royal house. In the sidebar to B. Jordan’s interview with the Expert magazine, the following information is provided (obviously from the words of the interviewee himself): “Among Boris Jordan’s maternal ancestors are the King of Georgia Vakhtang VI, the historian V.N. Tatishchev, the Minister of Public Education and the President of the Academy of Sciences A "S. Shishkov, publicist A. T. Bolotov, theologian Alexander Shmeman and other famous persons." (Two banks of the Jordan. "Expert", N1 dated January 29, 2001).
In the article “Cadet Finance” - E. Minaeva’s eulogy to Jordan, published many times in various publications (Company magazine, Gazeta.Ru, B-zTime.ru, etc.) there is more extensive information on this topic:
“As for “blue blood,” among Jordan’s maternal relatives there are many people from royal families. Maria Alexandrovna (Boris Jordan’s mother) is almost a princess. After all, it was her ancestor, Nikolai Petrovich Shishkov, who was married to Ekaterina Leonovna, nee Princess of Georgia , the great-great-granddaughter of the King of Georgia Vakhtang V (1675-1737). Moreover, Ekaterina Leonovna was the great-great-granddaughter of the famous Russian historian Vasily Tatishchev (1686-1750). (quoted from: http://www.gazeta.ru/print/yordan.shtml)
Somewhat higher in the same article, the years of life of Nikolai Petrovich Shishkov (the one who was married to a Georgian princess) are given: 1723-1869. However! He lived 146 years... And at the age of 89 he was a “participant in the War of 1812” (ibid.).
But here, apparently, Jordan himself, with his poor knowledge of arithmetic, still has nothing to do with it: Ms. Minaeva’s zeal is not in accordance with her mind. In fact, the science of genealogy knows the year of death of N.P. Shishkov, but does not know the year of birth.
Regarding the relationship of Shishkov N.P. We will not argue with the Georgian king. True, Vakhtang was not V, but VI (at least in 1675-1737 - “Expert” is more accurate), he also had a great-great-granddaughter - Ekaterina Lvovna, who married N.P. Shishkov, and her father was Lev Levanovich (1764-1800) was indeed married to Praskovya Ignatievna Tatishcheva (1767-1841).
But if the American Shishkov was definitely not a descendant of Admiral Shishkov and was clearly exaggerating when he called himself a captain of the first rank, then didn’t he (or his granddaughter? or the authors of the eulogies granddaughter?) also come up with a descent from N.P. Shishkov. and his spouses - “almost princesses”?
Grandfather Jordan, although he was never a minister, still turned out to be quite an interesting person. Here is what is written about him in a reputable reference book:
"Born in 1888.
He graduated from the Corps of Pages and two classes from the Nikolaev Military Academy (1918).
From the Corps of Pages he was released in 1907 into the Life Guards Uhlan Regiment of His Majesty. During the mobilization of 1914, he returned from the additional class of the academy to his regiment and in its ranks participated in all battles until mid-1915, when he was seconded to the general staff. In 1916 - senior adjutant of the headquarters of the consolidated guards cavalry division, and then in the same position in the 3rd cavalry division. In 1917 - i.d. Chief of Staff of the Guards Cavalry Corps.
From the beginning of 1922 he lived in Skopje (Kingdom of the SHS). Was in government service.
Here, of course, the most interesting thing is the service of Jordan the grandfather in the so-called. Russian security corps in the German-occupied former Kingdom of Serbs, Croats and Slovenes (SHS) in 1941-45. Jordan the grandson and his panegyrists are somehow silent about this detail of the ancestor’s biography, although his Corps of Pages, Life Guards and Volunteer Army are remembered appropriately and inappropriately.
The grandson, of course, should not answer for his grandfather’s service to Hitler (and for his father’s - about which below).
And almost 60 years have passed since the war.
And we now have the venerable “tricolor” “Vlasov mattress” (NB: the law on desecration of symbols has not yet come into force). Our brothers in the struggle for liberation from Soviet occupation - the Latvians - generally made the day of the creation of the Latvian Waffen SS Legion a public holiday.
Now, if Mr. Jordan either did not remember his grandfather in public at all, or, on the contrary, told the truth in his interviews: “he was not only a hero of the White movement, but also uncompromisingly fought against communism on the side during the Second World War Hitler..."
Now let us explain what the “Russian Security Corps” or “Russian Security Group” is.
M., AST, 2000, pp.17-20; Tsurganov Yuri. Failed rematch. White emigration in the Second World War. M., "Intrada", 2001, pp. 116-118).
However, they were not issued black SS uniforms to Russian policemen - fighters of auxiliary formations subordinate to the SS. It was only enough for a separate SS Volunteer Regiment "Varyag" led by Hauptsturmführer (former captain) M.A. Semenov, who was not part of the Russian Security Group and was considered a full-fledged SS unit, not an auxiliary one.
Lieutenant General B.A. Shteifon was appointed commander of the Russian Security Group (ROG) - who had two advantages over Skorodumov: Shteifon did not insist that the Russians would not fight the “Serbian nationalists” (Skorodumov wanted to write this into the charter of the created corps - for which, apparently, he ended up in the Gestapo), and his surname was of German origin.
For the same reason (German surname), Jordan-grandfather was soon appointed chief of staff of one of the two brigades of the security group. Unlike many other officers of the Volunteer Army, who retained their ranks only formally, Colonel Jordan was a real Oberst of the Wehrmacht (that is, he was accepted into the “real rank,” in church parlance). Other ROG officers, wearing the royal shoulder straps of Russian colonels and lieutenant colonels, were considered, for example, German lieutenants).
Russian policemen had the ranks accepted in the Wehrmacht (along with shoulder straps that did not always correspond to the ranks), but at the same time they wore (just like the Vlasovites from the ROA) the “Russian tricolor” on chevrons and armbands, and their regulations were... of the Red Army.
(This reminds me of something...).
The Serbs did not like the Russian “guards”.
“The ranks of the Group were ostracized by the Serbs who sympathized with the Soviet Union,” writes the historian of white emigration Yuri Tsurganov. “One of the proclamations read, “Whoever does not kill a White Russian is not a Serb!” (Tsurganov Yuri. Failed Revenge, p. 120) .
On November 30, 1942, the Russian Security Group (ROG) was again renamed the Russian Security Corps (ROK). Russian shoulder straps and insignia were abolished. Oberst Jordan was still chief of staff of the 1st Corps Brigade. Despite the renaming, the corps remained subordinate to the same SS Gruppenführer Neuchausen - that is, it was still an auxiliary formation under the SS. All servicemen of the corps received German uniforms (alas, again not SS) and took a personal oath to the Fuhrer:
Jordan Boris Alekseevich (Boris Jordan, born June 2, 1966, Sea Cliff, New York, USA) - Russian and American businessman, media tycoon, ex-CEO of NTV and Gazprom-Media (2001-2003), President of the Renaissance Insurance group (since 2006). Born into a family of Russian emigrants.
In 1987 he graduated from New York University with a bachelor's degree in Russian-American economic relations. After graduating from university, he worked as an analyst at the investment bank Kidder Peabody, then became vice president of the leasing company GPA Capital Inc. Since 1992, he served as managing director of the investment bank Credit Suisse First Boston in London and co-director of the Moscow branch of the same bank. In May 1995, he founded and headed the investment bank Renaissance Capital.
Since 1997 - President of IFC Renaissance, formed as a result of the merger of Renaissance Capital and the International Financial Company. In 1998, Jordan created the Sputnik investment group. In April 2001, after the assets of the Media-Most company came under the control of Gazprom, Boris Jordan was appointed general director of OJSC NTV Television Company, and in October of the same year - OJSC Gazprom-Media. In January 2003, he left both posts under political pressure.
He enjoys racing and sailing.
Married, has four children.
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The owner of Renaissance Insurance considers Rosgosstrakh the biggest problem in the market
Boris Jordan reveals the details of the 27 billion ruble deal, reflects on the problems of the financial market and talks about personal investments in the production of medical marijuana.
When the Russian ruble devalued in December 2014, the Bank of Russia, together with the government, encouraged exporters to buy the ruble, thereby stabilizing it. The value of the ruble is critically important for the Russian economy. The budget and exporters, on whom the Russian economy rests, need a cheap ruble with such a low oil price.
— And what are your forecasts for the ruble?
— I think that the trading range for the ruble is 60-90 rubles. for a dollar. The Russian currency is absolutely dependent on oil prices. And, of course, if the geopolitical situation changes, if sanctions are lifted, the ruble will strengthen. But I’m not sure that the country needs a significant strengthening of the ruble against the backdrop of budget problems and low oil prices.
— What about oil prices?
“We have not yet passed the period when the supply of oil exceeds demand. I think this situation will last for another six to 12 months. The price will be in the range of $25-45 per barrel.
- Big gap...
— This is a big gap from the point of view of ten years ago. The level of fluctuations in asset prices is such that this movement in oil and the dollar cannot be called large. In mid-February, the dollar cost 79 rubles, in mid-March - 68 rubles.
In a year and a half, the price of oil will stabilize and reach some normal level. It will not be $100 for the next few years, it will be $50-60 per barrel, but with the current ruble this would be the optimal situation for Russia.
— Was the economic decline largely due to geopolitics or lower oil prices?
—Oil, of course, plays a major role. In my opinion, 75% of economic problems are due to the fall in oil prices, and 25% are due to the imposition of sanctions.
— That is, if oil cost $100 per barrel, we would feel great and engage in import substitution with all our might?
- Absolutely. The economy would grow and the country would develop. Of course, sanctions have an adverse effect on the economy. They would not allow full development even with high oil prices. There would be a threshold for potential growth because sanctions restrict the movement of capital. But in the state we are in now - a state of deep economic crisis - oil prices play the greatest role. Even if sanctions are lifted now, nothing will change much. And if the price of oil soars to $60, the economy will begin to recover.
— How would you generally characterize the current situation in the economy?
— As with everything, there are positive and negative sides. I'm an optimist, so I'll start with the good. Imports are being replaced - this is a very good thing. I spoke about the need for this 20 years ago. It’s nonsense when Russian timber is exported to Finland, processed and sold to us for the construction of our houses. Therefore, I am glad that the crisis is changing this situation. If I were the government, I would give more support to small businesses. But even without actual support, for example, the agricultural industry is developing.
— Is it developing? Somehow it’s not noticeable that anything is growing... Or not?
— The production cycle in the agricultural industry takes several years, and we won’t see results right away. Much more obvious changes are taking place in small and medium-sized businesses. It is he who rightfully is the core of any developed economy, and not the industrial giants. But this business today is in dire need of additional government support in the form of affordable loans.
— Is this the negative side of the crisis?
— Yes, the main thing is that business financing is being reduced. In addition, the financial sector, due to the correct but forced aggressive policy of the Bank of Russia, has become quite risky for investment. Today, only profitable and efficient players can count on attracting external financing.
“This is purely political pressure on Russia”
— And globally, why did all this happen? Is the Russian economy generally predictable given the geopolitical surprises of the last two years?
— I have a clear opinion that sanctions are pure politics. Europe and the United States did not like the fact that Russia had foreign policy interests. In the 90s, Russia dealt with its internal problems, and after that, like any great power, it began to deal with its external interests. Now American foreign policy is built on pressure on Russian interests in Ukraine, the CIS and Eastern Europe.
Russian American
Chairman of the Board of Directors of the Renaissance Insurance Group and Chairman of the Board of the Sputnik Group Boris Jordan was born in 1966 in the USA into a family of Russian emigrants, graduated from New York University with a bachelor's degree in Russian-American economic relations. He started working as an analyst in a small investment bank. In 1992, he became managing director of the investment bank Credit Suisse First Boston in London, then managing director of Credit Suisse in Moscow. In 1995, together with five partners, including Stephen Jennings, he founded the investment bank Renaissance Capital. In 1998, he left the project and founded the Sputnik investment group, whose main asset today is the insurance business. In 2001-2003, he headed NTV and Gazprom Media. In addition, Jordan is a major venture investor. The Sputnik group has invested about $100 million in a dozen and a half projects such as PalliaTech, which deals with medical marijuana, or the online poker site PKR.com.
— Do you think that all these are elements of a political game?
- Absolutely. Absolutely coordinated policy.
“Isn’t this a movement for freedom?”
- Are you joking? ( laughs). Look at the election race in America: both Democrats and Republicans - the entire elite - want to destroy [Donald] Trump, although he wins the popular vote. So much for freedom of elections.
— This is purely political pressure on Russia. By all means.
— What do foreign investors think?
— I believe that in the near future we will not see anyone except speculators on the Russian market. Long-term money will never flow into the economy until a way out of the crisis is in sight. Strategic investors are ready to go into troubled economies, but only if they see movement in the right direction, towards a way out of the crisis. Today in Russia there is no way out of the crisis due to sanctions.
— And if the government starts privatization today, will they participate?
- Carefully. It is better to privatize when markets are growing and the economy is doing well. But if the budget needs funds, then there is no choice. There will always be buyers for strategic objects such as Rosneft and Sberbank, because this is a very good business. The only question is the price.
“By the end of the year we will issue shares for 3-5 billion rubles.”
“I believe that the Central Bank is behaving absolutely correctly. Many insurers lost assets during the 2008 stock market crisis and later in 2012 due to massive lawsuits over payments.
Of course, insurers would be happier if the requirement to replace assets appeared when the market is rising and there are no sanctions than when the market is falling. And the situation is not as acute as in the banking sector, because insurers are not involved in laundering or transferring money abroad. But it is still necessary to clean assets.
The main thing is that the Bank of Russia gives time to large companies to comply with the standards; in general, it does so. But it keeps me in good shape.
— According to our data, the Renaissance Insurance group must also bring its assets into compliance with the requirements of the Central Bank. Last year, together with the employees of the Central Bank, you drew up an asset recovery plan - is it being implemented? What is the situation now?
— We are talking about a plan to increase liquidity, it is this that has been agreed upon with the Central Bank and will be completed in the near future. We work in close coordination with the Bank of Russia. As part of this work, a new issue of 3-5 billion rubles will be carried out in 2016.
— What was wrong with the assets before?
— They were less liquid.
— Are you looking for investors on the foreign or domestic market?
- Here and there. Western hedge funds that have already invested in the company plan to buy part of the issue.
— What kind of funds are these?
- We will not disclose this.
- What about the rest of the money?
— We are still negotiating. We'll tell you when we close the deal.
— And what did you fill with the rest of the assets, before the issue of shares?
— For example, the assets include Renaissance Life packages, Sputnik Capital Management, real estate, investments and cash.
— According to IFRS data for 2014, the amount of cash in assets was only 1.8 billion rubles. (6.6% of assets). This is a very low share, on average in the market it is about 20-25% of assets. What is the situation now?
— After the issue, the volume of funds in assets will increase significantly. In addition, even at the end of 2015, our share of cash in assets increased. It is now higher than some insurance companies with larger sales volumes than us. By the end of the year, liquid assets in the company's balance sheet will amount to 35%.
— To control the composition and structure of assets, insurers must start working with a special depository. Has your company started yet?
— Yes, we have already concluded an agreement and started working with one of the special depositaries.
— So your assets are monitored by the special department on a daily basis?
— The Special Depository carries out monitoring in accordance with our agreement.
Owner of Renaissance Insurance Boris Jordan (Photo: Vladislav Shatilo / RBC)
“Sooner or later we want to realize our investments”
— How did your insurance business survive 2015?
Oddly enough, it was a record year for us, despite the crisis in the industry. Both insurance companies showed profits. The combined loss ratio of Renaissance Insurance in 2015 was at 85%. That is, our net profit amounted to 15% of the fees, or about 2.5 billion rubles.
We ensured that the auto insurance portfolio became profitable: at the end of 2015, it brought 5% profit. Health insurance is also lucrative. More than three-quarters of Renaissance Life's portfolio consists of long-term investment insurance, and not short-term corporate insurance, as it was 3-4 years ago. The profit of this company according to IFRS amounted to approximately 300 million rubles. at the end of the year.
- What are the reasons for these results?
— Investments in infrastructure projects have yielded results. Over the last three years, we have increased by approximately 15 p.p. The loss ratio fell and expenses fell by about 10%, and all this while the business grew faster than the market. We have created an analytical center that allows you to see the business picture in real time. We see statistics on cars, on drivers, on the city, on the seller and on all other indicators. I myself look at the analytics based on the results of the day, week or month, I see how the company is changing, I can quickly make management decisions, and see a possible problem before it arises.
— Most of your business is related to car insurance: out of 20.8 billion rubles. fees of 9.2 billion are due to comprehensive insurance (44%), another 4 billion rubles. — on compulsory motor liability insurance (about 20%). Other insurers see these sectors as problematic.
- We don't think so.
— Why did you even choose these areas as priorities?
— Car insurance all over the world is a very profitable line of business with proper customer segmentation. I believe that it will be profitable in Russia too. In general, it is already profitable for us. I believe we have an ideal auto insurance portfolio. Personally, I'm very pleased with it.
I see great potential for the development of this market, especially when the country’s economy recovers. Car sales have more than halved. But they will recover. I am more optimistic than my colleagues. I'm sure we'll have something to work with.
— Has the devaluation of the ruble hit your business?
Of course she hit me. But some of our assets were in foreign currency, which helped. In addition, we were able to quickly reach agreements on lower prices with our partners. This allowed us to balance costs.
— The sharp increase in prices for comprehensive insurance has scared off many customers. In a crisis, should prices be lowered or raised?
— Now we do not raise prices in order to attract more customers and money. This is beneficial during a crisis: a large amount of raised funds can be invested and earn on interest rates. In good times, on the contrary, you need to raise prices and make money on insurance.
—Are you planning to do some other business in Russia?
— In Russia we are focused on the insurance business.
— They say you were going to buy a stake in RAEX (“Expert RA”). How are the negotiations going?
— We are considering this possibility. We haven't made a decision yet. But even if this happens, it will be a small share, not a strategic investment.
— You said earlier that you would like to sell your insurance business in the future. Do you have this in your plans now?
— I have always said that a business is built for the subsequent implementation of its investments. This can be done in different ways: sale, IPO, dividends and so on. That is, sooner or later we want to realize our investments, since we have invested a lot. But for now this is impossible - Russian companies hardly have enough capital, Western investors have no desire to enter the Russian market, the IPO market is closed. To be honest, right now we are not thinking about selling the company at all.
“I’m not a scammer, I pay people”
— In terms of development, the banking business has stepped very far forward over the past ten years, which cannot be said about insurance. There are no mobile applications or special development of online sales, as well as normal, convenient settlement of losses. Why?
— The state’s attention is focused on the development of the banking system. Banks are saved in a crisis, they are helped. Until recently, no one paid attention to the insurance business. This is partly why I went into this business - I am sure that it is in such a situation that you can build the right and beautiful company.
— If you asked me now about my desire to go into the insurance business, I would think about it. There were several years - 2011, 2012, 2013 - when it was very difficult; another would have given up. Insurers were severely crippled by the decision of the plenum of the Supreme Court to extend the law on the protection of consumer rights to insurance [see. incision]. But in the end we achieved the results that I had hoped for. True, two years late.
"Automotive lawyers" or scammers
In June 2012, the Supreme Court clarified that consumer protection laws apply to insurance. Clients of insurance companies have the right to go to court at the place of their registration, file a claim without paying a state fee, demand compensation for moral damage, a fine of 50% of the amount collected by the court, and a penalty for compulsory motor liability insurance of 1% per day of delay. This led to a large number of claims against insurers and decisions in favor of clients. Insurers call lawyers who professionally provide legal services in this area “car lawyers,” considering most of them to be scammers. According to the Russian Union of Auto Insurers (RUA), in 2015, insurance companies paid clients 18.4 billion rubles based on a court decision. Of these, 57% accounted for compensation to the client, the remaining 43% went to “car lawyers,” says RSA.
“But if insurance companies paid properly, this wouldn’t be a problem?”
— Some insurers abused the trust of clients, others did not. The decision of the plenum of the Supreme Court gave “car lawyers” and fraudsters a way to make money from insurance companies. Billions of rubles were lost by insurers because of this decision, and all the problems with their assets appeared at that moment. Globally, not much has changed for clients - everything ends up with the “traffic lawyers”. If it weren’t for scammers and “car lawyers,” insurance rates would be lower, and settlement processes would be simpler and more convenient for clients.
— How then do you manage to sell cheap insurance, excluding any details or cases from coverage? If the courts almost always side with the client?
— In controversial situations, we reach agreements with clients before trial. And besides, we have learned well how to segment clients at the entrance to the company, using anti-fraud scoring (from the English fraud - “fraud”. — RBC). We have 15 people doing this, whose sole goal is to identify the client’s risk of fraud.
— Do you refuse outright or impose a prohibitive tariff?
— Prohibitive tariff. But there are clients to whom we do not give any tariff at all, because the fraudster can still earn more than the tariff.
— And all insurers swear at scammers and “automotive lawyers”...
“We fight too, but we found a way to work with it.” But, of course, the results would be much better if these scammers did not exist. In some regions the situation is generally catastrophic: fake documents, passports...
- And how to solve this problem?
“It seems to me that “car lawyers” who profit from insurance companies and their clients can be eradicated if penalties and fines collected in court go to the guarantee fund for compulsory motor liability insurance or to the country’s budget. Let the budget receive them.
— “Automotive lawyers” still solve problems for clients of insurance companies. If a person received only 50% of the required amount for repairs under insurance, then, of course, he will go to a “car lawyer” and go to court.
— So you understand, all penalties and fines received from us in court go only to “car lawyers”, they do not go to clients. Look at my business: we don’t make money on MTPL. The combined loss ratio of OSAGO in our company is 102%. I'm not a scammer, I pay people. I am sure that if you sell something, then you must fulfill the obligations. But at the same time, I still have to pay “car lawyers.”
If the client is dissatisfied with the payment, then, of course, he will go to court. And let the court collect additional funds from the insurance company for car repairs according to the results of an independent examination, this is correct. I repeat: why are insurance companies obliged to feed scammers by paying fines? Let the fine go to the state. It's my opinion.
The owner of Renaissance Insurance admires the Central Bank, reflects on the financial market and talks about the triumphs of medical marijuana
“The biggest problem for the market is Rosgosstrakh,” says Jordan, “but now the Central Bank is sorting it out, and I think the company will work according to market rules.” The poor don't buy insurance because they don't need it and it's expensive. The rich don't buy because they insure themselves with their assets. But the middle class is precisely those who buy insurance products. And in Russia, the insurance market is growing along with the middle class.
BIG DEAL
Boris Jordan has finally completed the merger of the financial assets of his Sputnik group and NPF Blagosostoyanie - the deal included about 10 companies. Jordan will have control over the new structure (52.1%), Blagostostoyanie will receive 35.8%, Baring Vostok will have 12.1%. How to figure out a deal for three with a Western investment fund and a Russian state-owned company (“Welfare” is controlled by Russian Railways), who he, a descendant of Russian emigrants in the United States, feels like - a Russian or an American, how his investments are distributed between the two countries, Jordan told Vedomosti.
— On the English-language Wikipedia website they write that you are an American businessman, but on the Russian-language Wikipedia you are simply a businessman. Who do you consider yourself to be?
— I’ve been living in Russia for 26 years, and the funny thing is that the American press writes that I’m a Russian businessman, and in Russia they write that I’m an American one.
I have American citizenship, but Russian origin. My father explained this to me best. I asked: “Dad, who am I anyway? Where am I from? I guess I'm American? And he said: “Tell me, if a fly is born in a stable, is it a horse?” Apparently, you are who you are by nationality, although citizenship is important. America is a rare example of a truly multinational country.
— Your deal with NPF Blagosostoyanie has been talked about for a long time. Why did it take so long to prepare it?
— In Russia now the main problem is that there is no capital market at all. It is not there because of the crisis, the financial sector is under such pressure that many investors do not want to invest in the financial sector. Therefore, our deal was structured with a partner such as Blagosostoyanie, who was interested in consolidating its insurance assets with ours. Blagosostoyanie combines its small insurance assets with the Renaissance Insurance group and receives a stake in a large company. Thus, both groups receive greater synergy, and Blagostostoyanie also receives a significant minority stake in the combined company.
The second partner is the international group Baring Vostok, which is known for its investments in successful technological and financial projects such as Yandex and Tinkoff Bank. And we are glad that we have such a strategic investor.
Against the background of what is happening in the financial sector, where there is a banking crisis, reorganizations and bankruptcies, we were able to carry out the largest transaction in the last 10 years - 27 billion rubles. on the Russian market with the participation of international capital. This shows how high quality the company itself is and that it is possible to make market transactions even in such unfavorable market conditions.
- You have a difficult partner - NPF "Welfare". Any government agency involved in a transaction always requires a lot of approvals, this is bureaucracy, there is no escape from it. Why Russian Railways?
— In Russia, from the point of view of the political and economic situation, it is a big plus to have both a Russian and an international investor. In world practice, a combination of three strategic investors is considered ideal: an insurance company, a pension fund and an international investor. This combination of partners is a high-quality foundation for further business development. Global insurers are primarily owned by pension funds. And we believe that we have reached the ideal capital structure.
— In general, many large state-owned companies are trying to get rid of non-core business, and in general, for Russian Railways, the financial business is non-core. Is there any agreement with partners in case Russian Railways wants to sell it?
— I don’t want to speak for “Welfare”; it’s better to ask them this question. But, from the point of view of the fund itself, it, on the contrary, improved its position. When Blagosostoyaniye is corporatized, insurance assets along with debts will no longer have to be consolidated, because their share in the merged company is only 35.8%. So this deal, on the contrary, helps Russian Railways.
- How will you act in this case?
— Our shareholders are a pension fund. The only thing that can change for us is the fund managers if, after corporatization in 2018, it is decided to sell the fund.
— Is the deal already closed? Who will run the company?
— Yes, on November 21, we closed a deal under which the combined group will include several companies. Renaissance Insurance and Renaissance Life will be merged with Intouch Insurance and the Blagosostoyanie insurance company, as well as their non-state pension fund. On our part, the management company Sputnik - Capital Management and the medical company Medcorp are also participating in the transaction. The entire classic insurance business will be headed by Yulia Gadliba, life insurance by Oleg Kiselev, and the management company by Alexander Losev. I will personally be involved in the strategic management of the entire group.
— What is the amount of investment from partners?
— The Sputnik group invests its assets plus money, NPF Blagosostoyanie invests insurance companies, money and one piece of real estate that interests us. This is a big building in Crocus City, maybe we will move there. And Baring Vostok invests purely cash, 3 billion rubles. The total investment amount is about 18 billion rubles.
— In recent years, insurance companies have been forced to consolidate: it is necessary to comply with more stringent regulatory requirements, the future of compulsory motor liability insurance is unclear, business conditions often change. How did you determine this deal for yourself? Is it forced for you?
— We worked very closely with the Bank of Russia. And in general, I would like to say that the work that the Central Bank is currently doing, at least in the insurance industry, is very correct. The big problem was that the companies' balance sheets did not reflect their real financial problems. Their owners built pyramid companies: they sold cheap insurance policies and did not think about their clients.
For companies that are truly and legitimately doing business, this is an unfortunate situation, but today the regulator has closed most of these companies. They still exist, but they are small in themselves. The biggest problem for the market is Rosgosstrakh, but now the Central Bank is sorting it out, and I think the company will work according to market rules.
All transactions, I believe, are forced to some extent. I don’t sell a share and don’t take money into my pocket - all the money goes to the company, for its development. And the assets that we consolidate also go to the company. For us this is consolidation. In the insurance business it is almost impossible to exist without large volumes. This is not a high-margin business, compared to companies like Yandex, where the margin is probably 40%. In the insurance business, the margin is a maximum of 5%.
— This is more than some banks.
— Banks have gone through a very big crisis. If you look at Tinkov’s bank, it has a margin of more than 5%.
“There are few like him.”
— The banking sector in Russia did not function very well. Now, after all the changes, the Central Bank is actually forcing banks to operate on market conditions. But due to the fact that most of them were not recapitalized, they disappear from the market. But I think that in the next 5–10 years (the Central Bank is looking at such a time frame) there will be a restoration of the banking sector. What the Central Bank is doing in Russia today, French, Italian, Spanish regulators do not want to do!
That is, the Central Bank forces banks to write off bad assets, forces them to reserve them, and those who cannot survive this, the Central Bank either sanitizes or makes them bankrupt. This is the right approach. This is what the Americans did after the crisis of 2008. Such a tough policy: you survive or not. The Americans, however, had additional assistance from the state, and the state made money on this - not lost, but earned money. But European banks did not do this; they are burdened with bad assets, and this does not allow them to fully recover from the crisis.
It's the same in the insurance sector. The reorganization law has not yet been introduced, but it is expected in the near future.
— Just as there is no law on the reorganization of pension funds...
— Yes, but not about pension funds. Therefore, the Central Bank either closes insurance companies, or, as in the case of Rosgosstrakh, whose share in the MTPL market until recently was 30%, is forced to rehabilitate them through the bank. I agree with the policy pursued by the Central Bank. Of course, it would be better to spend it in good times, and not such difficult ones as now.
Our deal was forced, but in what way? We needed to grow, and for this we needed to add assets in order to comply with the new rules of the Central Bank. This deal was beneficial for both the Welfare group and the Renaissance Insurance group, and Baring Vostok bought the asset at a good price. A company like Renaissance Insurance in Asia would have a capitalization of $1.5-2 billion. But here it is about $500 million. If you are a long-term investor, like NPF Blagosostoyanie and Baring Vostok, then you look not three years ahead, but seven years, and if the market recovers it will be a very successful investment.
— If you didn’t need to change assets for more liquid ones, would you go for this deal?
- I would have done it anyway. Because it gives qualitative business growth in quite difficult times - by about 15%.
— What assets of Renaissance Insurance should have been replaced?
— These are various investments of the Sputnik group that did not meet the new requirements of the Central Bank for quality and liquidity, which we kept on the balance sheet of Renaissance Insurance. Many of these rules changed during the financial sector crisis, so we negotiated a deal that helped change them.
— Weren’t these assets associated with Anatoly Motylev’s funds?
“I sold this business four years ago, and it has nothing to do with me now. (Seven NPFs of Anatoly Motylev’s group lost their licenses in 2015. Motylev bought one of them from Boris Jordan in 2013. - Vedomosti.)
— In general, what is the fate of the merged company? Are you planning to sell it together?
— We are all professional investors: both Blagostostoyanie and Baring Vostok. They, like us, have an investment period from three to 5 – 7 years. Then we will sell only if it is beneficial to our shareholders.
— Will you reinvest the money that will be received from the transaction? Where?
— All the money goes to the Renaissance Insurance group for its development. One of our strategies is to create our own medical holding company. We have plans to spin off the health insurance business into another company, which is currently being considered under the name Renaissance Health. This company will combine our VHI insurance business, our own clinics and several high-tech medical services.
I don’t like to invent anything in Russia, I like to do what has already been proven many times. And if you look at the structure of health insurance holding companies around the world, they stand out from the insurance companies.
— Will only you invest or “Welfare” too?
- All three of us.
— Can you disclose the size of the investment?
— These assets will be allocated in the next 12 months. Today there are three companies, but eventually there will be four. We believe that in Russia the service part of the medical market is at the beginning of its development and, together with our very large clientele in life insurance, this will create great synergy. This model has already been used many times in the West, i.e. we have not come up with anything new.
— What are your and your partners’ expectations from the deal? Relatively speaking, what should the company achieve in 5–7 years so that you can tell us in an interview: “That was a great deal”?
— We want to triple the value of the company from 27 billion rubles. within 3 – 5 years. That's our goal today. And we believe we can do this through organic growth and new acquisitions.
— Will this be mainly an insurance business?
— Life insurance, property insurance, medical business and asset management are our main four businesses.
In fact, the insurance business is very interesting; it shows the real development of the economy. Look, poor people don't buy insurance because, firstly, they don't need it, and secondly, it's expensive. Rich people don’t buy either, because they insure themselves with their assets. But the middle class - this is a global practice - is precisely those who buy insurance products. And we are now seeing growth in both the “life” and “non-life” markets: the restoration of car insurance, especially with falling bank rates. In 2008, about 3 million new cars were sold, last year - about 1.4 million, this year we expect 1.6 million, and next year - more than 2 million cars.
GREAT EXPECTATIONS
— In our country, insurance only works if someone obliges you to buy insurance: the state, the creditor...
— All over the world there are policies that are sold, and there are policies that are bought. The policies sold are life insurance. This needs to be sold. It is necessary to explain the benefits, risks, etc. Basically, life insurance is sold all over the world, and auto insurance is bought. So two years ago I purchased a good property in Miami, Florida. If I had not insured it, I would have had a big loss due to the recent hurricane. Naturally, I insured him. But in Russia it’s the same. You have an average salary, you took out a mortgage and built yourself an apartment. And suddenly your apartment is flooded or, God forbid, your house burns down, you are bankrupt if you do not have an insurance policy. You have lost all your capital. Or if you bought a new car, should you buy comprehensive insurance? Buy it. I practically don’t know anyone who doesn’t buy comprehensive insurance. These policies are purchased.
— Because compulsory motor liability insurance does not work, this is also a necessary measure.
— OSAGO works, the problem with it is different.
“This has long turned into a tax on cars. How transport tax is paid, we use the same principle to buy compulsory motor liability insurance.
— My opinion is that it was necessary long ago to combine compulsory motor liability insurance and comprehensive insurance and make one policy.
- But there were such policies.
- Yes, DAGO. It was simply necessary to combine it and make it a market product. But the liberalization of tariffs for compulsory motor liability insurance, which is now being actively discussed, will help balance the tariff and solve problems with the availability of compulsory motor liability insurance.
— Insurance losses continue for another year or two, has this period already passed for you?
- These tails have passed. Why then did they create a “single agent”? We and some other insurers left problem regions, and there was no one to sell policies to. But, most likely, the “single agent” will be abolished in 2018 due to the introduction of the new “e-Garant” system. In general, we see that the situation is leveling out and movement is beginning in the right direction.
— Will the law on natural substitution affect the situation?
“A little time has passed, and it’s still unclear. There are no statistics on ships and the cost of repairs. We've only had eight lawsuits filed since May. It is impossible to consider this as statistics. I think that’s why the Central Bank is waiting.
— When will the critical mass be reached?
— About a year should pass. In May, after the presidential elections, the Central Bank will be forced to solve this problem.
— Over these five years, how has your combined loss ratio changed?
— As soon as we entered the “single agent” system, our loss ratio for compulsory motor liability insurance jumped significantly. Over six months, the ratio increased from 89 to 95.5%.
— What are your forecasts regarding large insurers? Will there be consolidation?
— I believe that there will be a merger of companies. The same thing will happen in Russia as in the West: banks will be forced to sell insurance companies. Previously, all major American and European banks had their own insurance companies. Nowadays, no bank has an insurance company anymore. They sold everything. Mainly due to the fact that it was unprofitable for them to keep insurers on their balance sheets, because the banks' return on capital was falling. Due to new capital requirements under Basel III, banks were forced to sell their insurers.
— How do you assess such rapid growth of the investment life insurance (ILI) market?
— I believe that the ILI in the form in which it is presented today will not exist in the long term. The current ILI is too short a life insurance product; it is mainly three years old. And there is a question regarding profitability for the client. ILI in a format from five to seven years will be supported by real market assets. Such a product has great prospects in the Russian market.
— This year the first three-year policies are expiring, and everyone is really waiting to see what the feedback from the public will be, because the Central Bank predicts that people will be dissatisfied with the profitability, since the declared profitability and the real one are unlikely to coincide.
— We are aware of the shortcomings of ILI, so today we have concentrated on endowment life insurance (CIL), which is a more appropriate product for the client. ILS is a long-term 10-15-year product that has a significantly higher profitability for the client than ILI.
— Why do you think that the bet on the NSJ will be justified?
— Your generation is starting to think about children, family and buys NSHI - this is long-term, 10 - 15-year insurance. I have such insurance in the USA. I have five children and I worry about their future. I have such a policy, God forbid, something happens to me. Plus it is cumulative. This is a more conservative way to save money than entering the stock market. Do you understand? And it is interesting from a tax point of view. After the presidential elections in Russia, I am sure that taxes will be raised, because no other country in the world has such a low income tax. And life insurance provides tax benefits. Why are these policies purchased in the USA? Because the state helps the population save in this way, gives tax breaks - you do not pay taxes on the money you set aside for long-term insurance. Thus, the regulator creates a market for long-term money and also gives a tax benefit to the population.
In Russia there is already a noticeable movement in this direction, there are tax incentives, and as soon as the tax rate is raised, this market will actively develop. We believe that long life insurance has very good prospects. And our whole focus is on this, and before we sold mainly short-term products. We were the first to launch a credit product - life insurance along with a loan.
— Was it Home Credit?
- How are you selling now?
— If you look at the global life insurance markets, this is how everything developed. All. They start with the shortest product through banks, then move on to a three-year investment product. Then, as soon as people begin to understand the essence of this insurance, they switch to a long-term product, which most people around the world buy, i.e., a 10-15-year policy. The Russian market is just moving into this part. Next year, I think, there will be a strong drop in ILI. The Central Bank itself not only approves the NSJ, but also develops it. This is the right product that is selling successfully all over the world.
“To do this, we need to complete the cleanup so that the company can exist for 10 years.”
— In insurance, I think the cleanup is 90% complete. 85% of MTPL premiums fall on the top 10 insurance companies. And all companies from the top 10 are included in the list of systemically important companies, and the Central Bank carries out intensive supervision over assets. Every day we submit all data on assets to the Central Bank. In the banking sector, this purge is only now taking place and will continue for some time; in the insurance sector, it was carried out quite quickly and most of the problem companies were closed.
— Where do you invest more now?
— Now, I would say, 50/50. Until 2014, we were mainly in Russia.
— Then they began to invest more abroad, what is the reason for this?
— There were serious shocks in 2014: ruble devaluation and political risks. We decided that we needed to diversify our investments.
FIVE WITH PLUS NABIULLINA
— By what signs, other than the growth in insurance sales, have you come to the conclusion that the investment climate in Russia is improving?
— We look at what is happening with interest rates, with inflation, we see international portfolio investments, Eurobond issues, even shares in different industries on the Russian market. There have been more international capital transactions this year than in the last five years.
— In one of your last interviews, you said that the situation will be ideal for Russia when the oil price reaches $60. She has reached.
“And I said that the situation is improving, that’s a fact.” I think mainly because of this. We see a stable ruble; $55 – 60 is a good level for the ruble. We do not see any sharp shocks or pressure on the currency or the securities market. And we see an improvement in liquidity in the capital market, shares have been overvalued, companies are again trading at levels that allow them to compete with Western companies. And if there were no political tension, a boom would now begin in Russia.
If you talk to economists, most of them will say that from the point of view of the macroeconomic situation, the Central Bank has performed an excellent job. In addition, Fitch is considering raising Russia's credit rating, and we think that Moody's and S&P will follow. I think Russia's rating will improve. And in my opinion, the sanctions in a sense helped Russia: they forced the Russian economy to concentrate not only on oil and gas. Consumer goods, agribusiness and many other sectors began to grow. The financial sector, insurance, banks, and non-state pension funds are being restructured.
— Is there a risk that the agricultural industry will quickly collapse if the sanctions are lifted?
“And I wouldn’t be in a hurry to cancel them.” I think that the agricultural sector in Russia will be competitive, but painful areas remain. Firstly, the ruble. With inflation at 4%, the ruble could trade significantly stronger than it is trading now. But we, as Russian business, do not want to see it strengthen. This will lead to problems with competitiveness, they will again start purchasing products abroad, etc. You need to be able to work with currency, and I believe that the Central Bank understands this problem quite well and the ruble will not fall below $50.
Secondly, interest rates should be reduced to 5–6%. There is no capital on the Russian market. This is the main problem. There are fewer banks and insurance companies, and money does not reach small businesses. Why are regional banks developing strongly in America? Because regional ones help all small businesses. Large banks will not give loans to small businesses.
- They didn’t give it before, for this we are now creating a two-tier banking system.
— We need banks at the next level. For example, make Otkritie or B&N Bank like this. Now it is difficult for a small businessman, and even an average one, to get normal money. When you are offered loans at 14–15%, and inflation is 4%, you will not be able to exist.
This is the most important question for the Central Bank - they need to sharply reduce rates to provide an incentive for market development. Why did our deal take so long? For 26 years, I made deals worth billions of dollars in Russia. I did them from two months at most to three quarters of a year. And here we worked for two years on a deal that is significantly smaller than all those deals. Because there is no capital market. If banks take at 4–5% and give at 8%, this is a normal margin for banks, and businesses can take out such loans. In the USA, we take out loans for start-up businesses at 6–8%.
- But that's a lot.
- For a startup. Large ones charge 3 – 3.5%. And the largest one charges at 2.5%.
“IN RUSSIA THERE IS NO CLEAR UNDERSTANDING OF WHAT THE LEGAL MARKET FOR MEDICAL MARIJUANA IS”
- Can you clarify further? Somehow you did not have very public information on the shareholders of the Sputnik group.
— I control the Sputnik group.
— Dmitry Bakatin and Mary Ferrier also appeared in the capital. What is their share?
— My partners in the Sputnik group: Sergey Ryabtsov, Dmitry Bakatin and Mary Yadu Ferrier.
— You said in one of your interviews that you invest in three markets: Russia, the USA and England.
— Yes, but we recently sold our business in England.
— What kind of business did you have there?
— It was a very small business, worth $10 million, it’s not even interesting to write about it.
— Would your American partners like to invest in Russia?
— Most businessmen, especially in the United States, do not believe in the political hysteria about Russia created by the political conflict between Republicans and Democrats. I believe that this story is an internal American showdown. They simply chose Russia as a convenient target around which to fight. And people, of course, are afraid. However, businesses, especially those that have companies in Russia, do not look at it this way, they work and develop normally. But today it is very difficult for the board of directors of any American company to approve investments in Russia.
— Who are your main partners in the USA?
— In the USA, the main partner is myself.
— In what areas do you invest?
— We have two businesses in America. The first is PalliaTech, a major player in the rapidly growing medical marijuana market. I own a controlling interest in this company in 13 states, and other local shareholders have become my partners. The second business is the new Measure Eight holding.
— What kind of holding is this?
— This is a private equity fund that invests in American venture investments.
— What is the volume of Measure Eight?
— Target by the end of 2018 — $200 million.
— Is this money from investors?
- Yes, mine too.
— How much did you ultimately invest in PalliaTech?
— We never say how much we invest, but PalliaTech is a rapidly developing company. Its capitalization is hundreds of millions of dollars. By early next year we expect it to exceed a billion dollars.
—Have you already listed it on the stock exchange?
“We didn’t put it on the stock exchange.” As a private company, it is mainly financed by me. We will make the first external placement somewhere at the beginning of next year, and at the end of 2018 - beginning of 2019 we want to list it on the exchange most suitable for this issue. Canada is now the best market to list shares of a medical marijuana company.
— Would you like to repeat your success with PalliaTech in Russia?
— Today, I think in Russia there is no clear understanding of what the legal market for medical marijuana is. In fact, it is a generally accepted fact that medical marijuana has very strong medicinal effects. This is a professional pharmaceutical business built on a single product - the marijuana flower, from which all sorts of components are isolated for various drugs and disease conditions.
Today PalliaTech is a world leader in the production of medical marijuana. The company's business is divided into several areas. The first is the cultivation of medical marijuana. The state strictly controls all manufacturers who have received a license to produce marijuana. We have built medical laboratories in all 13 states. We employ scientists, highly qualified specialists in botany and pharmaceuticals. The second area is laboratories where drugs are created. There are dozens of components in marijuana, and by isolating them, you can obtain various medical products. One component is suitable for the treatment of glaucoma, and another for alleviating the effects of chemotherapy. There are drugs that increase appetite, reduce pain, help sleep, smooth out epilepsy attacks, etc. The third direction is the sale of the finished drug in a specialized pharmacy. You can buy the drug you need with a prescription. We intend to develop further and obtain licenses for production and sales in other states.
— In recent years in Russia, the problem with pain management has become obvious to many.
— In recent years, attitudes towards medical marijuana have changed dramatically throughout the world, since this flower has strong healing properties without serious side effects, unlike potent drugs. For example, the use of medical marijuana significantly reduces epileptic seizures. 35% of American children with epilepsy benefit from the medicine we produce from the marijuana flower. All other medications, at best, help in 5.5% of cases. Medical marijuana is legal in Israel, Portugal, Holland, Italy. England and France are currently considering such a bill, and Spain is about to approve it. We have now applied for a license in Germany and are buying a company in Canada. But Russia has not yet moved in this direction. I would be interested, but the mindset in Russia is very closed.
— Are you personally ready to lobby for this topic in Russia?
After all, we are conducting research work with one of the best medical universities in the USA - in Pennsylvania. And we are only now beginning to understand how enormous the potential of all the components of the marijuana flower is that can be used in medicine. We had a case: a patient with pancreatitis, who had eight months to live, was barely transported in a wheelchair. He was on strong drugs and was in terrible pain. He was prescribed our medicine, three weeks later he drove a car, entered our pharmacy and bought the medicine! Yes, we won’t cure him, but he will live normally in his last months. Or arthritis. Medical marijuana does not cure arthritis, nor does it cure epilepsy. But it reduces symptoms. And the whole world understood this.
— If a legal opportunity to build a similar business appears in Russia, will you be interested?
— We know Russia well and, of course, would be interested in entering the market. But we need to build proper regulation of this market. And I’m not yet sure that Russia is ready for this. In the USA, for example, they also did not approach regulation in the best way.
- What's the problem there?
— In America, medical marijuana is still illegal at the federal level. It is legal in every state where local law exceeds federal law. But we expect that medical marijuana will be legalized at the federal level in the United States in the near future. It is mainly pharmaceutical companies that are against it. They spend billions of dollars on lobbying. In every US state where medical marijuana has been legalized, sales of painkillers have fallen by 15–20%. Pharmaceutical companies are actually losing business because of it.
— Is the production and sale of medical marijuana controlled?
— Everything is completely controlled, from development to sales. In Russia, the possibilities of medical marijuana are still viewed with skepticism. Business is interested, but politicians are afraid. Although there is nothing to be afraid of - this medicine really helps.
Tatiana Voronova, Anna Kholyavko
Vedomosti, 11/22/2017
Boris Jordan is the owner of the Renaissance Insurance group.
Born in 1966 in the USA. Graduated from New York University with a bachelor's degree in Russian-American economic relations
1989 - worked at GPA Capital, left the company as vice president.
1992 - Managing Director of the investment bank Credit Suisse First Boston in London, then Managing Director of this bank in Moscow.
1995 - founded and headed the Renaissance Capital bank, in 1998 - the international investment group Sputnik.
2006 - personally headed Renaissance Insurance (a key area of investment for the Sputnik group in Russia).
Renaissance Insurance Group LLC is an insurer. Created in 1997. In 2004, the specialized life insurance company Renaissance Life joined the group.
Owner: Sputnik investment group of Jordan and partners.
Financial indicators (IFRS, 2016):
- bonuses - 21.9 billion rubles;
- payments - 10.98 billion rubles;
- net profit - 548.1 million rubles;.
President of Renaissance Insurance Boris Jordan talks about the ability to maneuver in business, avoiding its pitfalls.
Boris Jordan admitted to Vedomosti that he considers himself a “born entrepreneur,” and of all his businesses, he loves insurance the most. I’m a New York driver and sometimes I swear while driving, so don’t be scared, Boris Jordan jokes, complaining about the capital’s traffic jams and bad roads. We drive from Moscow to Tver in his official Audi, and the president of Renaissance Insurance manages to make stock transactions even while driving. In fact, Jordan, who a year ago headed his main business today, Renaissance Insurance, is almost an ideal client for insurers. He drives carefully, follows the rules, except that he doesn’t wear a seat belt. Jordan spoke about his ability to maneuver in business, avoiding its pitfalls, in an interview with Vedomosti. - You have been personally managing Renaissance Insurance for a year now. Why? - There are two types of entrepreneurs. Some reach a certain level and stop, while others constantly develop their business. I love building businesses, I get a thrill from it and consider myself a born entrepreneur. Between NTV and Renaissance Insurance, I was only involved in investments for two years, but then I again wanted to build a business. - Why has insurance become the main direction of development of your business? - The insurance market in Russia has great potential, but there are few strong competitors. Management companies open a fund, collect money, place it and receive an income of 3%. I don’t like working for 3%. I created an insurance company, raise capital, invest and receive 100% of the income. I like this idea because I am an investment banker and now I am building not an insurance company, but an investment group. - How has the company changed? - A year ago, Renaissance was in 20th place in the ratings [of leading insurers in Russia in collecting premiums], but now it ranks 11th. In 2007, we greatly strengthened our brand awareness and reputation. We launched large-scale projects to transform business processes within the company. We carried out a gigantic reorganization of our regional network. Previously, each Renaissance office existed as a separate company; now all regional offices are subordinate to one of six regional divisions. - How do these changes affect profitability? - It is possible to maintain profitability, especially given the fact that we are growing rapidly and investing a lot in regional development. In 2008 we should reach the level of self-sufficiency, and in 2009 we expect a combined ratio of 94-95%. And this is with serious investments in infrastructure and without taking into account investment income. - What types of insurance are the drivers of overall portfolio growth? - Auto insurance, property insurance. We are already a leader in the mortgage insurance market. At the end of 2008 we expect a big jump in sales in retail and corporate insurance. - How should Renaissance's business grow in 2008? - The risk portfolio should increase by 50%, the life insurance portfolio - by more than 100%. - You planned to create a separate management company... - This company still exists within the framework of Renaissance Insurance. We are in the process of obtaining a license. The company will be headed by Evgeny Shetyashin from Uralsib. He and his team have been working for three months now, creating an infrastructure to attract capital not only within Sputnik, but also externally, through products that the insurance company’s network will sell. From the beginning of 2008 the company will begin to operate on the market. - How much money is under management of the company now? - $300 million. This money will be partially packaged into mutual funds, there will be pension products, private banking. We expect that by 2010 the company will manage at least $2-2.2 billion - half of these funds will be given to the companies of the Sputnik group. - Tell us about the creation of a pension fund together with the EBRD. - The project is in its initial stage, we offered a share to the EBRD. We wrote a strategy for the fund, the board of directors of Sputnik approved the concept. Now the manager hired for this project must make a business plan and defend it at the board of directors. The pension project will be launched in 2008. It takes at least a year to create both a pension fund and a management company. - How is the business of Renaissance Life developing? Does the EBRD plan to withdraw from this project? - Three years have passed since the announcement of the deal. In the first year, the company did not fulfill the plan, so we fired the CEO, and in the third year we exceeded the plan by 10%. The EBRD's investment horizon for the project is seven years. So far they are happy with everything. We launched a company in Ukraine. Agents reached sales levels of more than $1 million in new premiums per month. We are growing faster than anyone in Russia. - And why? - We know how to sell. We are aggressive. We have two main competitors in this segment - AIG and Alliance Rosno Life. But we make decisions faster than companies whose shareholders are in Europe or America. - Are there enough life insurance clients in Russia today? - Risk insurance is bought, but “life” is sold, so a lot depends on the relationship between the client and the agent. Our target audience is the middle class who are thinking about protecting their lives and property. But you'd be surprised if you look at our life insurance portfolio: it's a very broad spectrum of people. - You sold the Afisha Publishing House and left the timber business. What other projects have you come from? - We recently sold our stake in the Canadian oil company Innova. This is a very successful company, it produces oil in the provinces of Saskatchewan and Alberta. But managing a company located in Calgary from Moscow was difficult. We sold the business to competitors for $380 million. This deal has already been closed. - What are you buying? - All my efforts are now focused on developing the financial business. Sputnik will have another financial project, the beginning of which we will announce at the end of the year. This is an almost new product for the market, but I can’t tell you about it yet. - How do you assess the consequences of the financial crisis and its impact on the economic situation in the world and in Russia - your forecast for its development? - It is inevitable that a crisis of this magnitude will have consequences for the Russian economy. There has been a sharp narrowing of borrowing opportunities, the amount of money Russian companies need to develop their business has seriously decreased, and their cost has increased. Companies that actively borrowed in the West are either refinancing their debt at higher rates, or are forced to refuse loans and borrowings altogether - they simply will not be able to service them. However, I don’t expect sudden defaults. There is a significant decrease in liquidity on the market, but the Central Bank and the Stabilization Fund will most likely take measures, and the system will not be left without money. - In your opinion, will investment activity increase after the presidential elections or can these things not be connected? - Presidential candidates have not been officially announced. But this does not bother Western investors, because Vladimir Putin has his finger on the pulse and the political situation in the country is under control. Therefore, in my opinion, the business community should not be afraid of sudden changes in the political climate in Russia. Much more important in today's situation is the stability of the global economy. - When you took over the management of Renaissance Insurance, you were going to deal with the current affairs of the company every day. It turns out? - Of course, I’m in the office every day, but sometimes I get a little distracted. This week saw the successful IPO of our English company Telecity, and I couldn't help but follow it. The total size of the IPO was more than $220 million, of which Telecity received $150 million, the rest from shareholders. Now 25% of Telecity shares are traded on the market, Sputnik has 10% left. I bought Telecity at the stage of bankruptcy, now the company's capitalization is estimated at $1.2 billion. It is the largest operator in Europe providing data center services. We build such centers for computer systems and server support in Sweden, Germany, Holland, France, Spain, Italy, England and Ireland - these are special floors, ceilings, generators for uninterruptible power supply. We sell server space and electricity to providers, and also sell clients access to providers. One of our clients is the British government, and MI5 has listed our center in England as a strategic location. In Russia we also plan to provide such services. - How do you relax from work? Do you have a hobby? - I love to sleep - I do it so rarely that I have learned to value [sleep]. All his life he was actively interested in tennis, alpine skiing and sailboat racing. I love fishing - on the river and sea, in the Canadian Alps, in Kamchatka. I caught the biggest fish - a 300 kg marlin - in the Bahamas. I have five children - four boys and one girl, and I try to take them on vacation more often. They live in London and when I'm not with them they speak English. With me - only in Russian. I try to make sure that they do not forget their native language and their roots. The glorious past of Boris Jordan Opener of markets In 1995, Boris Jordan with partners - Stephen Jennings, Leonid Rozhetskin and others - created the first investment bank in Russia, Renaissance Capital. The struggle for metal In the mid-90s, Jordan's companies became minority shareholders of the Novolipetsk Iron and Steel Works. Unable to gain access to NLMK management, they sold shares of the plant to its current owner, Vladimir Lisin. Brought Soros to Russia In 1997, Jordan attracted George Soros to participate in the auction for the privatization of 25% plus 1 share of Svyazinvest. Soros spent $1.9 billion to purchase this stake. He sold Sidanco in 1997-1999. Jordan was a member of the board of directors of Sidanco. It was he who organized the deal to sell 100% of Sidanco shares to British BP. Viktor Vekselberg and his partners earned $571 million from the deal. Change of role In 2001, Jordan became the general director of NTV and Gazprom Media. During his two years of work, control of NTV passed from Vladimir Gusinsky to Gazprom. Did not reach Polyus Gold, Sputnik, Alrosa and VTB this year made an offer to purchase a 25% stake in Polyus Gold. But the other day Alexey Kudrin said that the deal would not take place because they had not agreed on a price. Jordan does not comment on this project. Biography Born in 1966 in New York. Graduated from New York University, bachelor's degree in Russian-American economic relations 1992 managing director of the investment bank CS First Boston in London and Moscow 1995 founder and head of Renaissance Capital 1999 founder and to this day president of the Sputnik group 2002 general director of Gazprom media", NTV 2006 President of Renaissance Insurance Jordan invested $200 million in Renaissance Insurance in a year. $135 million - loan, investment in the company's management company - $42.5 million Assets of Boris Jordan Group "Renaissance Insurance" insurance company. Since 2005, it has included the Progress-Neva company. Insurance reserves - 5.8 billion rubles. (as of June 30, 2007). Premiums - 4.3 billion rubles. Payments - 2.1 billion rubles. Shareholders - 100% of the Sputnik group. Sputnik Group is an international investment company with more than $1 billion of its own funds under management. Owns shares (the size is not disclosed) in more than 25 companies, of which more than 10 are in Russia, the CIS, Great Britain, Germany, and North America. Main assets - shares in Telecity Group (one of the leading players in the European market of independent collocation - data centers for hosting and maintaining servers), Thielert (German manufacturer of high-precision aircraft and automobile engines and parts), Oxford Biomedica (developer of innovative genetic medicines, used in oncology and neurotherapy), Sputnik Labs (leading Russian system integrator). SHAREHOLDERS - Boris Jordan (main owner), Dmitry Bakatin, Sergey Ryabtsov (shares are not disclosed).