The amount of premiums collected by ARX (risk insurance) and ARX Life (life insurance) insurance companies in 2023 totaled UAH 4 billion, which is 32% more than in 2022, according to a press release from the insurer.
At the end of 2023, the amount of premiums collected by ARX Insurance Company for hull insurance amounted to about UAH 2 billion, which is 29% more than a year earlier, for MTPL – UAH 300 million (+27%), voluntary health insurance – more than UAH 500 million (+22%), and property insurance – more than UAH 400 million (+38%).
The net profit of ARX and ARX Life for 2023 amounted to UAH 504.555 million.
The press release also states that the financial statements have been prepared in accordance with IFRS 4.
Earlier it was reported that ARX and ARX Life insurance companies paid UAH 1.4 billion to customers in 2023, which is 33% more than a year earlier. Payments for hull insurance amounted to UAH 837 million, which is 20% more than in 2022; MTPL – UAH 117 million (+42%); voluntary health insurance – UAH 265 million (+50%); property insurance – UAH 57 million (+17%); life insurance – UAH 69 million (+37%).
In 2023, new products and services were introduced: “Minicasco is an economical hull insurance that covers the main risk on the roads: Road accidents both through the fault of the driver and without. The price of the policy starts from UAH 1,175 thousand. It operates on the territory of Ukraine.
Iron Dome motor hull insurance is a product that protects cars from military risks. It covers damage and complete destruction from missiles, UAVs, and debris.
The policy “CASCO without a visit to the office” – from now on, to purchase a CASCO policy, if the car is subject to inspection, you can independently carry out its photo and video recording in the MyARX smartphone application.
The “Step-by-step settlement of the case” product was also introduced – another update to the MyARX insurance application, which allows you to see the registration, consideration of the case, determination of the amount of damage, the decision in the case, and the amount of compensation.
ARX Life, like ARX, is part of the international insurance holding Fairfax Financial Holdings Ltd.
In January-September 2023, ALC Insurance Company ARX Life (ARX Life, Kyiv) collected insurance premiums in the amount of UAH 234.7 million, which is 18.71% more than in the same period of 2022, according to the website of RA Standard Rating.
According to the RA’s information on updating the company’s credit rating/financial strength (reliability) rating at uaAAAA according to the national scale, the volume of payments and reimbursements made by the insurer for the first nine months of 2023 increased by 31% to UAH 49.426 million compared to the same period in 2022. Thus, the insurer’s claims ratio increased by 1.97 p.p. to 21.06%.
The insurer’s acquisition expenses for the first nine months of 2023 increased by 5.15% compared to the same period in 2022 – up to UAH 117.201 million.
According to the results of January-September, the company received a net profit of UAH 53.214 million, which is 3.09 times more than the profit received in the first nine months of 2022.
As of September 30, 2023, the insurer’s assets increased by 24.42% to UAH 287.277 million, equity increased by 44.46% to UAH 172.906 million, liabilities showed an increase of 2.86% to UAH 114.371 million, cash and cash equivalents decreased by 30.90% to UAH 45.745 million.
Thus, as of the beginning of the fourth quarter of 2023, the company had a very high level of capitalization (151.18%) and a sufficient level of coverage of its liabilities by cash and cash equivalents (40.00%).
At the same time, the RA notes that as of October 1, 2023, the insurer made financial investments in the amount of UAH 216.102 million, which consisted of government bonds (81.18%), government bonds (9.57%) and deposits in banks (9.25%).
ARX Life, like ARX, is part of the international insurance holding Fairfax Financial Holdings Ltd. ARX Life is among the top 10 companies in the life insurance market in Ukraine.
ALC Insurance Company ARKS Life (ARX Life, Kyiv) has collected insurance premiums in the amount of UAH 152,2 mln in January-June 2023, that is by 11,2% more than in the same period a year earlier, according to the website of RA Standard-Rating. According to RA information on the company’s renewal of credit rating/rating of financial stability (reliability) of the insurer at the level “uaAAA” according to the national scale, the volume of payments and indemnities, performed by the insurer for the first half of 2023, has grown in comparison with the same period of 2022 by 32,05%, to UAH 31,818 mln. Thus, the level of payments of the insurer has increased by 3,32 percentage points (p.p.), up to 20,91%.
At the same time, acquisition costs have grown by 6,51%, up to UAH 77,997 mln.
The company’s net profit for January-June amounted to UAH 33.963 mln, which is 2.44 times more than the profit obtained in the first half of 2022.
Assets as of June 30 increased by 15.77% to UAH 267.289 mln, equity – by 28.38% to UAH 153.655 mln, liabilities – by 2.19% to UAH 113.634 mln, cash and cash equivalents – by 33.25% to UAH 88.221 mln.
RA also notes that as of July 1 of the current year the insurer has made financial investments in the amount of UAH 159,267 mln, which consisted of government bonds (85,09%), OVDP (2,35%) and deposits in banks (12,56%).
ARX Life, like ARX, is part of the international insurance holding Fairfax Financial Holdings Ltd. ARX Life is among the top 10 companies in the life insurance market in Ukraine.
In January-March 2023 ALC “IC ARX Life” (ARX Life, Kiev) collected premiums to the amount of UAH 73,3 mln, that is by 5,06% more than in the same period last year.
It’s reported on the site of RA “Standard-Rating” about the renewal of credit rating/rating of financial stability (reliability) of the insurer at the level “uaAАА” according to the national scale.
The indemnities of the insurer in the Q1 of 2023, compared to the same period of 2022 has grown by 61,75% up to UAH 17,961 mln. Therefore, the level of payouts of the insurer has grown by 8,58 p.p. – up to 24,50%.
Acquisition expenses of the insurer have decreased by 4,22% down to UAH 38,333 mln in the first quarter of 2023 in comparison with the same period of 2022.
According to the results of work in the first three months of 2023 IC “ARCS Life” has received a net profit of UAH 15,410 mln that is 2,89 times more than the profit received in the Q1 of 2022.
As of April 1, 2023 the assets of the company have increased by 4.91% up to UAH 242,225 mln, shareholders’ equity has increased by 12.87% up to UAH 135,102 mln, liabilities have reduced by 3.66% down to UAH 107,123 mln, cash and cash equivalents have reduced by 39,85% down to UAH 39,819 mln.
At the same time, RA notes that as of April 1, 2023, the insurer has made financial investments in the amount of 182,043 mln UAH, consisting of government bonds (83,52%) and deposits in banks (16,48%).
ARX Life, like ARX, is a part of the international insurance holding Fairfax Financial Holdings Ltd. ARX Life is among the top 10 companies in the life insurance market in Ukraine.
Although 2022 was a difficult year for the whole of Ukraine and for the insurance industry, it did not become a verdict – the industry survived, insurance did not disappear, insurers generally have a slight decline by 2021, and some even have a very good increase.
This was written by Vyacheslav Havrylenko, CEO of ARX Life Insurance Company, Deputy Chairman of the Board of ARX, in a column published by Interfax-Ukraine.
Risk insurance market
In numbers, in 2022, the market fell by about 11% compared to the previous year, which is very good in a time of war. If we look at the market without the Green Card, the drop will be 17%, which is also a satisfactory result. These are preliminary data based on information from members of the National Insurance Association of Ukraine.
The Green Card has become the leader in insurance, with growth of 152% (due to the massive departure of Ukrainians abroad, especially at the beginning of the war). The volume of premiums was stable, with only a slight drop of 3%. Health insurance fell by 16%. The biggest drop was in hull insurance – 20% year-on-year.
Travel insurance grew by almost 42%. Property insurance (in the corporate segment) was also a surprise – our premiums fell by only 25%, although we did not expect such a moderate drop. One of the reasons is that global insurance programs have largely disappeared and customers have turned to local insurers. The market benefited from this.
If we describe the behavior of customers, we can say that although the demand has dropped (due to financial difficulties, the inability to insure at all in parts of Ukraine, the catastrophic drop in new car sales and the drop in car loans), it has not disappeared at all – customers felt the need for insurance. Ordinary insured events have not disappeared, and insurers compensate customers for their losses. In 2022, ARX paid UAH 826 million in indemnities, and we continue to make payments under the contracts of the previous year.
Life insurance
Regarding the life market, we can state that, just like in non-life, the market withstood in 2022. At the same time, the total premiums of all life companies in general showed a 14% decrease compared to the previous year. Some companies experienced a bigger drop, but some showed a slight increase. The composition of the main players has not changed over the past year.
While overall there was a moderate drop in payment volumes, in the non-lending individual insurance segment, we even grew by 5% compared to 2021.
Corporate insurance showed an increase of 10%. As for clients, our portfolio amounted to more than 430 thousand clients in 2022. Unfortunately, this is a clear decline in the total number of clients compared to the previous year. Therefore, we are focused on retaining customers and focus on reliable and high-quality service – we take care of our partners and customers every day.
We ended last year with a profit of UAH 25 million, which is more than 2 times higher than in 2021. As for payments, we collected almost UAH 270 million, which, unfortunately, means a 16% decrease in payments in general compared to the total fees of the previous year.
But overall, we are optimistic about the future. For example, in 2022, we launched a new product called “Armor Protection”, which is accident insurance that includes military risks. So it’s definitely not time to stop.
What to expect in 2023
Regarding plans for 2023, it is clear that it is impossible to predict how the situation with the war and the economy will develop (although we are optimistic), but we must plan our activities. So we will try to achieve a year-on-year growth of 22% to 23%.
Of course, these are average figures, and they will differ for different types of insurance, sales channels and regions of Ukraine. Perhaps this is a somewhat ambitious plan, but we see it as such. We will see what happens in reality; in January we fulfilled our plan.
We do not foresee a significant increase in new car sales this year and do not forecast a significant increase in the share of car loans in these sales. Therefore, we continue to focus our sales on car insurance without loans, including used car insurance – it is clear that these will be not only full hull insurance programs. In particular, we continue to actively develop online sales and hybrid sales (transfer of online leads to sales offices and call centers). We are also actively working with cross-selling to MTPL customers, but the main resource for many companies will be the renewal and retention of their own base of existing customers.
Therefore, we will continue to focus on high quality of service, development of additional in-house services, and will prove our main advantage – true fundamental reliability.
Against the backdrop of the war, falling demand, and financial difficulties, the NBU continues its systematic and systematic work to oversee companies’ compliance with financial standards. So, all together, all insurers are pushing all insurers to work profitably (otherwise there will be a lack of capital) and form reserves with the proper assets, but at the same time constantly improve the quality of their services and not try to achieve profitability by “cutting” justified payments to customers; continue to move further into digitalization, but reduce operating costs.
Undoubtedly, some companies will leave the market due to the factors described above, but almost all large companies with Ukrainian capital and all international companies will remain in the market. In general, customers will benefit because the reliability of insurers and the quality of their services are increasing.
