The situation with the reinsurance of Ukrainian risks in international markets has worsened since the beginning of the war, and a rather small circle of reinsurers who worked with Ukrainian companies has also narrowed, the director of the representative office of Oakeshott Insurance Consultants Ltd. (Britain) in Ukraine, Tetiana Babko, told Interfax-Ukraine.
According to her, many reinsurers are not ready to see the risks due to the war and the fall of the economy, since in such cases the quality of the risks themselves is sharply reduced. Others see a danger to themselves in compliance, which is very complicated due to restrictions and sanctions, so they simply exclude not only Belarus and the Russian Federation, but also Ukraine from their business. Some reinsurers prolong old contracts, but do not write new business.
In addition, there were also difficulties for obligators with a renewal date of April 1. Few insurance companies in Ukraine managed to get a renewal for a year, more often reinsurers offered to prolong the current contract for two or three months.
“It is difficult for obligators to adequately assess the situation and their ability to continue working in Ukraine. Now, on July 1, the situation will be even more aggravated, as forecasts about the duration of the war are getting worse, the volume of premiums in obligators is declining, and there is little economic sense for reinsurers. And this is against the backdrop of a lack of insurers’ and brokers’ opportunity to buy foreign currency and pay reinsurance premiums,” Babko said.
The purchase of currency for reinsurance, in accordance with resolution No. 81 of the National Bank of Ukraine dated April 22, 2022 on amendments to resolution No. 18 of the NBU board dated February 24, 2022 is limited to a small list of risks. This has an extremely negative impact on the willingness of reinsurers to cooperate with the Ukrainian market.
According to Babko, the insurance business, primarily various associations, is actively coming up with their proposals and interacting with the authorities. However, the insurance market has not developed a unified position for discussion with the regulator.
