Ukrainian insurance companies collected net premiums in the amount of UAH 18.688 billion in January-June 2020, which is 7.1% less than in the same period a year earlier (UAH 20.121 billion), according to a posting on the website of the National Bank of Ukraine (NBU).
According to the regulator, the volume of gross insurance premiums collected by insurers for the specified period amounted to UAH 21.008 billion, which is 23% less than in the first half of 2019 (UAH 27.291 billion). Of these, premiums received from individuals amounted to UAH 9.589 billion, from reinsurers – UAH 1.806 billion.
According to the NBU, in January-June 2020, insurers paid out UAH 6.642 billion of net insurance payments in claims, which is 1.7% more than in the first half of the year earlier (UAH 6.527 billion). The level of net payments increased from 32.4% to 35.5%.
Gross insurance payments increased by 2.3% to UAH 6.833 billion. The level of gross payments increased from 24.4% to 32.5%. Of the total volume of gross payments, payments to individuals amounted to UAH 3.129 billion, to reinsurers – UAH 237.7 million.
According to the NBU, the volume of insurance payments belonging to reinsurers in the first half of the year amounted to UAH 4.191 billion, of which UAH 1.934 billion to nonresident reinsurers.
As of June 30, the assets of Ukrainian insurers on the balance sheet amounted to UAH 61.888 billion, while on the same date a year earlier they were UAH 65.265 billion. The volume of assets determined by legislation to represent insurance reserves increased by 30%, to UAH 55.592 billion, while the volume of paid charter capital decreased 17.3%, to UAH 9.599 billion.
The regulator also said that during the specified period, the volume of formed insurance reserves increased by 8%, to UAH 31.359 billion.
In this period, 57.897 million insurance contracts were signed.
According to the NBU, the total number of insurance companies in Ukraine as of June 30, 2020 was 215, while on the same date a year earlier there were 249 companies, including 20 (26) life insurance companies.
Ukrainian Sawmills LLC (Kostopil, Rivne region), which produces sawn timber, furniture panels and semifinished products, declares a critical situation in connection with the failure to deliver the full volume of logs by state-run forestry enterprises legally acquired by the company at open auctions, the company has said on its Facebook page.
“We, the newest sawmill, launched at the end of 2017, are now on the brink of survival. The most important problem is providing raw materials in full, or rather begging legally acquired raw materials from state-owned forestry enterprises. According to the results of the third quarter of 2020 (left only three days before it ends), the forestry enterprises of Zhytomyr and Volyn regions, as well as some forestry enterprises of Rivne region supplied us with less than 50% of the purchased wood,” the company said on Monday, September 28.
Ukrainian Sawmills said that they participate in all auctions for the purchase of coniferous sawlogs, since this year they decided to fully utilize the existing design capacities.
“We will demand additional supplies of logs. But who will compensate us for the forced downtime, loss of business reputation due to unshipped products to buyers and possible penalties for our failure to fulfill obligations?” the company said.
In addition, the company drew attention to the fact that some auctions are announced in such a way and at such a time that only those “for whom the auction is specially held” can learn about them.
“It turns out that we already have a system of shadow auctions so that the right raw materials go to the right people, and not to those who want to buy. Formally, everything seems to be honest: there is an official announcement and an auction is being held (print screen is attached). But the problem is the one for whom this auction is specially held, without providing for other participants, can only know about it,” the company said.
Ukrainian Sawmills appeal to the Office of the President, the Cabinet of Ministers, the State Forest Resources Agency and the regional forestry and hunting departments with questions about holding such auctions, at what prices they buy raw materials, whether there are any abuses and unlawful benefits.
Ukrainian Sawmills LLC was registered in September 2014 in Kostopil. According to the public register, 100% of the charter capital is owned by the company Ukresta Holdings Limited, registered in Cyprus.
OPPO AED Ukraine, a subsidiary of the Chinese OPPO, has noted the growth of the smartphone market in Ukraine by 5% after the quarantine and expects the growth of smartphone penetration in Ukraine to continue in the next few years.
“The impact of the pandemic, quarantine [on the market] should be taken into account. It is clear that it caused a short-term decline and made its own adjustments, but the demand for smartphones due to telecommuting and education, online shopping has increased, and the market itself has also increased after quarantine by 5%,” OPPO AED Ukraine CEO Henry Wang said in an interview with Interfax-Ukraine.
He also said that according to the company, the average price of a smartphone in Ukraine is UAH 5,800 and has not changed over the past year.
“This is due to the current general economic situation in the country. I believe that with social stability and a gradual recovery of the economy, the average price of mobile phones will continue to grow… Now we understand that the greatest demand will be in the budget price segment – that is, all smartphones that cost less than UAH 6,000. On the Ukrainian market, this segment will probably be from 60 to 80%,” Wang said.
OPPO AED Ukraine also expects that with the spread of 4G communications, more and more Ukrainians will switch to smartphones.
“We believe that the Ukrainian market has the potential to become one of the largest in demand for 5G smartphones in the next few years after the launch of 5G networks, and the penetration rate will stabilize at over 80%,” the CEO of OPPO AED Ukraine said.
National bank of Ukraine’s official rates as of 01/10/20
Source: National Bank of Ukraine
Official rates of banking metals from national bank as of October 01
One troy ounce=31.10 grams
The structure of consumption of motor fuels in Ukraine needs to be corrected in order to maximize the use of oil refining capacities, equalize the trade balance and increase tax revenues, according to the A-95 Consulting Group (Kyiv).
According to the group, the main distinguishing feature of the Ukrainian fuel market is the high share of liquefied petroleum gas (LPG), which has reached a world record 33% in the retail sales of motor fuels. In terms of the use of LPG in transport, Ukraine is one of the five largest on the planet – in 2020 the consumption of LPG will exceed 2 million tonnes.
“The Ukrainian basket of motor fuels is atypical from the point of view of world practice and gives rise to a number of serious problems. These are, first of all, the decline and quite likely disappearance of domestic oil refining, a decrease in tax revenues, an increase in imports of liquefied gas and diesel fuel from Russia and Belarus,” Director of the A-95 consulting group Serhiy Kuyun said.
In his opinion, the main reason for the disproportion in the consumption of petroleum products is unbalanced taxation. The excise tax on LPG is four times lower than on gasoline – EUR 52 against EUR 213 per 1,000 liters, which is almost half the excise tax on gasoline and the tax on diesel fuel – EUR 139.5 per 1,000 liters. This curving has led to a distortion in consumption, as fuel with low excise duty becomes more attractive to consumers: from 2013 to 2019, consumption of liquefied gas increased by 115%, diesel fuel – by 17%, while gasoline consumption fell by 43%.
“The huge demand for LPG and diesel fuel stimulates their imports, more than 70% of which comes from Russia and Belarus. Meanwhile, Ukrainian refineries operating on Ukrainian and non-Russian imported raw materials are loaded by less than 50%. They cannot sell gasoline, but refuse from its production is impossible due to technology,” Kuyun said.
At the same time, the transition of consumers to low-tax fuels also affects the national budget, since excise taxes on oil products are the main source of filling the road fund, from which the construction and repair of roads are financed.
To reach the optimal basket of petroleum products consumption, the excise rates need to be adjusted. According to the calculations of the A-95 Consulting Group, if today the excise tax on gas is 24.4% of the excise tax on gasoline, then in order to solve the problem of balanced oil product supply, this ratio should be at least 70-75%. At the same time, the excise tax on diesel fuel can be left at the current level.
The transition to a new consumption structure should be smooth, which will take at least five years. “Gasoline will become more affordable, liquefied gas will rise in price, but it will retain its price attractiveness. Refineries will receive a development perspective, the market will reduce dependence on imports, and the state will receive additional taxes,” the A-95 group said.
