The latest audits of the statements of insurers for the second half of 2020 showed that 46 of them violate the standards, and 15 did not submit financial statements, while for a long time they had difficulties with complying with the mandatory standards, the deputy governor of the National Bank of Ukraine (NBU), Yaroslav Matuzka, wrote in the author’s column of the Ekonomichna Pravda edition, according to the website of the central bank.
“We have studied in detail the circumstances of these violations. They are not caused by the increased requirements of the regulator. Most of the violations are deliberate actions of the management of insurance companies related to the withdrawal of eligible assets,” he stressed.
Among the main reasons for the problematic state of the companies, Matuzka named excessive expenses that have no economic justification, the exchange of highly liquid assets – government bonds for the corporate rights of unknown LLCs, which clearly have no corresponding value and will not be sold after that for the same amount. In addition, he named the purchase of incomprehensible securities or the order of services not related to insurance activities, the conclusion of reinsurance contracts, in which the amount of possible payments is less than the amount of insurance premiums paid for such reinsurance.
Another reason for violations is the transfer of funds from insurance reserves as collateral for loans to shareholders, or even those who are clearly not related to the insurer at all. There are a lot of such examples, the banker says.
At the same time, he noted the presence of a separate category of insurers – seekers of quick money.
“Their business models are based on the MLM (multilevel marketing) principle – came, saw, conquered, disappeared. Insurance indemnities in such business models are usually paid from the insurance premiums of new contracts. So to speak, just-in-time,” he said.
In his opinion, this is happening because insurers pursue a rash policy of agency fees in order to enter the market and quickly take a niche, taking it from someone else. First of all, clients suffer from this, who after some time end up with nothing with their insured events, because when the volumes of the insurer fall and it can no longer bear such costs even just-in-time.
Ukrainian President Volodymyr Zelensky has the highest rating of trust by Ukrainians among all politicians, as 46% of respondents have said they trust him, the Sociological Group Rating found based on a public opinion poll of 2,500 respondents it conducted using the Computer Assisted Telephone Interviewing (CATI) method on March 26-28, 2021. Another 51% of the respondents said they mistrust Zelensky, the poll found.
Kyiv Mayor Vitali Klitschko is trusted by 33% and mistrusted by 54% of the respondents, former Prime Minister Volodymyr Groysman trusted by 32% and mistrusted by 58%, and Verkhovna Rada Chairman Dmytro Razumkov trusted by 31% and mistrusted by 36%, with 29% of the respondents not knowing him.
Batkivschyna party leader Yulia Tymoshenko is trusted by 29% and mistrusted by 69% of the respondents, former President and leader of the European Solidarity party Petro Poroshenko trusted by 23% and mistrusted by 75%, and Opposition Platform – For Life leader Yuriy Boiko trusted by 23% and mistrusted by 58%, with 15% of the respondents not knowing him.
The poll also found that 22% of the respondents trust and 74% mistrust former Prime Minister Arseniy Yatsenyuk, 22% trust and 68% mistrust Interior Minister Arsen Avakov, 16% trust and 51% mistrust Prime Minister Denys Shmyhal (27% do not know him), and 15% trust and 74% mistrust Opposition Platform – For Life leader Viktor Medvedchuk (with 9% not knowing him).
The hryvnia exchange rate, after weakening at the end of March, will strengthen in the second quarter due to increased sales of foreign currency by farmers before the start of field work, the majority of bankers polled by Interfax-Ukraine are inclined to this opinion.
“In the near future, the hryvnia will receive support from the sale of foreign currency by farmers for the spring field work, which is likely to lead to a slight strengthening of the national currency,” head of the analytical department of Alfa-Bank Oleksiy Blinov said.
In his opinion, the most probable range of exchange rate fluctuations in the second quarter is the range of UAH 27-28/$1, with a moderate vector of movement towards temporary strengthening.
Blinov added that, despite the uncertainty about the prospects for quarantine, the factor of their strengthening is unlikely to become the determining driver of the Ukrainian foreign exchange market in the second quarter.
His opinion is shared by the chief manager for macroeconomic analysis of Raiffeisen Bank Aval, Serhiy Kolodiy, who expects the seasonal strengthening of the hryvnia in the second quarter to UAH 27.0-27.5/$1 and predicts that, if possible, the NBU will try to replenish its reserves by buying out excess foreign currency supply.
“An additional positive background for the hryvnia can be created by active negotiations with the IMF regarding the first review of the current SBA program and the acceleration of the still rather slow rate of vaccination of the population,” the analyst noted.
A similar opinion was expressed by the director of the risk management department of Accordbank, Mykola Voitkiv, who predicts the revaluation of the hryvnia exchange rate with the prospect of strengthening to UAH 27.00/$1.
“Taking into account the continued high prices for the main commodity items of Ukrainian exports, the beginning of the sowing campaign (a seasonal factor in the increase in foreign currency sales on the part of agribusiness), the presence of interest in investing in government bonds from non-residents, I do not expect the rate to rise above UAH 28/$1,” he said.
In addition, the tightening of quarantine measures and low rates of vaccination in Ukraine limit the recovery of demand for currency both from the population (tourist trips) and business, especially in the field of trade, the banker noted.
Map of internet coverings of ukrainian basic mobile operators in Jan 2021.
National bank of Ukraine’s official rates as of 02/04/21
Source: National Bank of Ukraine
Official rates of banking metals from national bank as of April 02
One troy ounce=31.10 grams
