The main problem with the draft Strategy for the Development of Ukraine’s Insurance Market lies not in individual phrases, but in the very methodology used to develop it, according to a statement by the Insurance Business Association (IBA).
It is also noted that the ASB views positively the very attempt to formulate a long-term state policy for the development of the insurance market and a number of proposed directions. Among them are the development of health and life insurance, war risk insurance, and agricultural insurance; expanding investment opportunities for insurers’ assets; further alignment of Ukrainian regulations with EU law, conducting a quantitative impact assessment prior to the full implementation of new solvency requirements, and revising certain excessive regulatory requirements.
At the same time, based on the results of its analysis, the ASB concluded that the main problem with the draft lies not in individual formulations, but in the very methodology used to structure it: the objectives, indicators, and measures do not form a sufficiently consistent cause-and-effect chain from market diagnosis to a measurable outcome.
According to ASB experts, one of the most striking examples is the goal of increasing insurance penetration from 0.81% of GDP in 2025 to over 2% of GDP in 2029–2030. Based on the macroeconomic assumptions used to validate the ASB’s analysis, reaching 2% by 2030 would require an increase in insurance premiums from approximately 72.3 billion UAH to 306 billion UAH—a rise of more than 4.2 times. This implies an average annual nominal growth rate of about 33.5% and a real growth rate of nearly 25% each year over the course of five years. The draft does not specify which insurance classes, or how many new customers, insured individuals, vehicles, properties, and businesses, would be required to achieve this result.
“An ambitious figure in and of itself is not a strategy. If it is not backed by calculations of effective demand, the number of new customers and insured assets, economic prerequisites, and specific measures, it remains a wishful target rather than a well-founded goal,” notes Vyacheslav Chernyakhovsky, CEO of the Association of Insurance Companies of Ukraine (ASB).
According to the ASB, the results of government policy should be measured by what has actually changed for citizens, businesses, and the insurance market, specifically: how many people and businesses have received insurance coverage; how many vehicles and properties are actually insured; how affordable insurance premiums are relative to the incomes of citizens and businesses; whether the sum insured and the quality of coverage have increased; whether the gap between existing risks and actual insurance protection has narrowed; and how competition and the ability to choose an insurer are maintained.
In the ASB’s view, growth in insurance premiums should not automatically be considered a sign of progress. For example, the sharp increase in premiums for compulsory motor third-party liability insurance (CMTPL) in 2025 was largely the result of a transition to a new pricing structure and an increase in the cost of policies, rather than a corresponding increase in the number of insured vehicles. Therefore, the ASB proposes evaluating monetary indicators simultaneously in current and constant prices, while distinguishing price changes from changes in the physical scope of insurance coverage.
Based on the results of a detailed analysis of the draft Strategy and Roadmap, the ASB concluded that the identified shortcomings cannot be addressed solely by making isolated amendments to individual provisions, and that it is advisable to prepare a new version of the Insurance Market Development Strategy through 2030, based on modern strategic planning methodology, realistic financial and economic calculations, and well-founded trends in key indicators.
The report notes that the draft Strategy for the Development of the Ukrainian Insurance Market and the Roadmap for its implementation were prepared by the National Bank of Ukraine in collaboration with other state institutions as part of the work of the Financial Development Committee under the Financial Stability Council.
Chernyakhovsky, INSURANCE MARKET
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