Ukrainian insurance companies in 2020 collected UAH 215.3 million of premiums under insurance contracts concluded through resident brokers, which is 24.3% more compared to 2019 (UAH 169.1 million).
According to the website of the National Bank of Ukraine (NBU), during this period 10,747 contracts were concluded through resident brokers, while in the same period a year earlier, according to the former regulator of the National Commission for Financial Service Markets Regulation it was 24,724.
The amount of remuneration for the provision of such intermediary services for the specified period decreased 28.8%, to UAH 20.02 million.
Reinsurance payments received by resident insurers under 166 contracts amounted to UAH 30.747 million, while a year earlier under 128 contracts it was UAH 12.660 million.
According to the NBU, nonresident reinsurers through brokers received UAH 1.085 billion for reinsurance under 244 contracts, while in the previous year it was UAH 920.7 million under 258 contracts.
Insurance payments compensated by nonresident reinsurers for the reporting period amounted to UAH 422.519 million, which is 2.9 times more.
The NBU does not provide indicators of remuneration for brokers for the reporting period; at the end of 2019, they amounted to UAH 34.619 million.
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.
Astrum Ukraine LLC, which owns 99% of the shares of Forte Life insurance company (Kyiv), has reduced its stake to zero, according to the official information of the insurer.
It is noted that Oksana Kuleshina became the owner of 99% of the shares of the insurance company.
According to the unified state register of legal entities and individual entrepreneurs, Kuleshina is the ultimate beneficiary of Astrum Ukraine LLC.
Forte Life (formerly Insurance Union Life), registered in 2005, specializes in providing services in the field of life insurance.
Ukrainian insurance companies in January-June 2019 collected UAH 106.5 million of premiums under insurance contracts signed through resident intermediaries, which is 70.8% more compared to the same period a year earlier (UAH 62.322 million), according to the website of the National Commission for the State Regulation of the Financial Services Market. The number of contracts concluded through resident intermediaries for January-June grew by 7.3 times, to 18,937.
Remuneration for the provision of such intermediary services for the specified period grew almost 3.5-fold, to UAH 14.19 million.
According to the commission, nonresident reinsurers through brokers received UAH 347.071 million for reinsurance under 112 contracts, while in the first half of last year, UAH 630 million under 152 contracts was transferred. Payments were made in the amount of UAH 35.762 million (UAH 196.7 million in the first half of 2018). The remuneration of brokers amounted to UAH 11.360 million (a fall of 20%).
In January-June 2019, insurance companies of Ukraine collected net premiums in the amount of UAH 20.121 billion, which is 20.1% more than for the same period in 2018, the gross insurance premiums collected by insurers for the specified period amounted to UAH 27.291 billion (a 16.5% increase compared to the first half of 2018).
According to the regulator, the total number of insurance companies in Ukraine as of June 30, 2019 decreased by 42 and amounts to 249, including 26 life insurance companies.
The insurance companies of Ukraine in January-September 2018 formed insurance reserves in the amount of UAH 24.8 billion, which is 15%, or UAH 3.2 billion, more than in the same period of 2017, member of the National Commission for the State Regulation of the Financial Services Market Oleksandr Zaletov has told Interfax-Ukraine. In his opinion, the growth of insurance reserves is associated both with the general increase in the volume of insurance services to the population and enterprises, as well as with the improvement of the actuarial valuation of insurance obligations.
As of September 30, 2018, current accounts and deposits in banks in the structure of placing insurance reserves accounted for 52.8% (UAH 13.1 billion), government domestic loan bonds for 28.6% (UAH 7.1 billion), rights of claim to non-resident reinsurers for 9.3% (UAH 2.3 billion), and real estate for 4.8% (UAH 1.2 billion).
According to Zaletov, a lack of offers from the stock market led to the fact that insurers’ investments in stocks and corporate bonds amounted to less than UAH 400 million, or a mere 1.5% of insurance reserves.
The insurance companies of Ukraine in January-June 2018 collected net premiums for the amount of UAH 16.747 billion, which is 24% more than for the same period a year earlier, according to the website of the National Commission for the State Regulation of Financial Services Markets.
According to the regulator, the volume of gross insurance premiums collected by insurers for the period was UAH 23.425 billion (10.4% more).
The commission notes that an increase in gross insurance premiums was recorded for almost all types of insurance: auto insurance (KASKO, OSAGO, Green Card) by UAH 937 million, or 18.6%, life insurance by UAH 487.7 million, or 39.2%, credit insurance by UAH 442.8 million, or three times more, insurance of liability to third parties by UAH 419.7 million, or by 37.1%, insurance against accidents by UAH 316 million, or by 61%, property insurance by UAH 285.3 million, or 10%, medical insurance by UAH 263.8 million, or by 18.7%, medical costs insurance by UAH 139.6 million, or 34.7%, insurance against fire risks and risks of natural phenomena by UAH 105 million, or 5.2%.
The share of net insurance premiums in gross insurance premiums for the first half of 2018 increased by 7.8 percentage points from the same indicator of 2017 and amounted to 71.5%.
In January-June this year insurers paid UAH 5.863 billion in net insurance claim fees, which is 27% more than for the same period a year earlier. The level of net payments increased to 35% from 34.2%.
