Since the beginning of the Russian military aggression in Ukraine, the insurance market of Ukraine has decreased by five participants in the non-life segment, Yulia Khristolyubskaya, deputy head of the department for supervision of insurance companies of the National Bank of Ukraine, said at a meeting with insurance market participants on Thursday.
According to her, of these insurers, three left the market after the cancellation of licenses as a measure of influence, one – upon application, and one insurer, which was registered in January 2022 and did not receive a single license.
“We do not observe any rapid exit of companies from the market as a result of supervisory actions of the NBU or at the request of insurers. The market is stable and continues to work in most of its participants,” Khristolyubskaya said.
She also clarified that as of September 22, 2022, licenses for insurance activities were temporarily suspended for three companies, and they were canceled for one.
According to her, as of September 1, 2022, 140 insurance companies were registered in the State Register of Financial Institutions, 13 of them specialize in life insurance.
With reference to NBU data, Khristolyubskaya also said that 91% of insurers filed reports for 2021, 96% of those entered into the State Register for the first half of 2022, and 97% of companies included in the state register for the first quarter.
At the same time, she stressed that of all segments of the non-banking financial market, the insurance market has the highest level of reporting discipline. This is a consequence of the constant communication of the supervisor with problematic insurance companies by sending requests for information disclosure and applying adequate enforcement measures.
Insurance companies ARX (UAH 810.2 million), Uniqa (UAH 669.7 million) and IG TAS (568 .9 million UAH, all Kyiv).
According to the main performance indicators of Ukrainian insurance companies published on the NBU website for 1 sq. 2022, while the leaders in insurance payments for 3 months. were Uniqa (UAH 276.4 million), ARX (UAH 271.2 million) and TAS SG (UAH 244 million).
Accrued insurance premiums under Green Card international insurance contracts concluded by the member companies of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) in January-November 2020 decreased by 28.65% compared to the same period in 2019, to UAH 1.099 billion.
As the MTIBU reported on the website, the number of Green Card contracts concluded during this period fell by 44.9%, to 554,194.
At the same time, the amount of compensations paid on claims grew by 12.14%, to EUR 15.323 million, while the number of claims paid by 4.4%, to 15,323.
The MTIBU is the only association of insurers that provide compulsory insurance of civil liability of land vehicle owners for damage caused to third parties.
The share of brokers and agents on the Ukrainian insurance market, which today reaches slightly over 2%, could significantly grow in 2019 in relation to the economic necessity and European requirements for insuring major risks, Director of Oakeshott Insurance broker (the U.K.) George Grishin said at a meeting with representatives of large business held in the residence of the British ambassador to Ukraine. According to him, if in Germany, through intermediaries, 72% of insurance contracts are concluded, in the United States, Canada – 95% in life insurance, in Italy – 76% in risk insurance and 44% in life insurance, in the U.K. – 70% and 48% respectively, while in Ukraine only 2%.
“An effective and widely available abroad tool for effective protection of possible risks, such as insurance brokerage, is undervalued in Ukraine. We have high hopes that with our active support, advocacy and activities, trust in brokers will increase in 2019 and their share of the insurance market will increase significantly,” Grishin said.
Director of Oakeshott insurance agency (Kyiv) Yuriy Hryshan said that the European directive regarding insurance intermediation notes its pivotal role on developed markets, which passed the evolutionary way from the large number of insurance companies providing similar services to fewer insurers with wider offers. The major part of insurance products is sold via insurance intermediaries. They, unlike the insurance company, which, in fact, is a supermarket with a standard set of services, make products tailored to specific customers.
Speaking about the perception of the insurance market by foreign partners, Grishin said that many cannot understand how a company that, in fact, is not engaged in insurance, is in the top five Ukrainian insurance companies in collecting premiums. This is known to all and this has been going on for many years.
The main reason for underdevelopment of the Ukrainian insurance market is distrust of both consumers and public agencies to it. “There are no investors, and no demand both for insurance products and insurance companies on the market,” he said.
He said that among the main disadvantages of the market are a large number of insurance companies which quality of assets does not correspond to the tasks set by the market; unresolved relations between company owners and top management; low level of supervision, the main reason for which is current legislation. Speaking about the market prospects in the future, Grishin said that since Ukraine is aimed at European integration, in the future Ukrainian insurers will have to meet European requirements. In particular, the size of the charter capital for risk insurance companies should be EUR 3 million, for life insurance companies – EUR 5 million.
According to Hryshan, the key principles in composing any insurance contract are: determining the insured amount in the event of an insurance event, designating all possible risks that can lead to financial losses, full confidence in the insurer, since much depends on the human factor on the financial market. “Major risks should be well placed, otherwise money is thrown out the window,” he said. According to Grishin, all European insurance is built on trust and openness between the insurer and the client. Most of any insurance contracts are customer data about themselves. “If I send a contract to a client for filling out and I see that his part about personal data and details about doing business is not filled, I know that foreign insurers will refuse to cooperate,” he said.
Oakeshott is a broker of Lloyds of London. It first was present on the Ukrainian market as direct maritime broker – since 1995 in Odesa, Mariupol and Illichivsk (now it is Chornomorsk). Since 2000, it started operating in Kyiv as representative of the British insurance broker.
The Ukrainian insurance market in the volume of insurance premiums collected in 2017 in foreign currency equivalent was 61st in the world, and in the pace of growth it was among the top ten most dynamic global markets, member of the National Commission for Financial Service Markets Regulation Oleksandr Zaletov has said, speaking at the 18th International Financial Forum in Odesa last week. He said that over the past 10 years the insurance companies of Ukraine have made insurance payments in claims to the population and enterprises in the amount of more than UAH 67 billion, of which UAH 5.5 billion was recovered through cooperation with leading foreign reinsurers and reinsurance brokers from Switzerland, the U.K., Germany, Poland, Austria, the United States, France and other countries.
This year, as in previous years, in all segments of the insurance market, there has been a trend towards an increase in the volume of services provided.
In January-June 2018, net insurance premiums increased by 24% and amounted to UAH 16.7 billion, net insurance payments – by 27%, to UAH 5.9 billion.
The size of insurance reserves accumulated by insurers amounted to about UAH 24 billion (an increase of 15.4%). Against a 14.5% decrease in the volume of reinsurance, the amount of reinsurers’ compensation in insurance payments increased by 58.6%.
In H1 2018, over 36.6 million insurance contracts were concluded with individuals (an increase of 8.2%), apart from compulsory personal transport accidents insurance, the number of contracts increased by 12.8%, to 65.5 million.
Endowment life insurance covers over 738,000 citizens, which insurance premiums reach some UAH 8.1 billion. Investment income in the amount of UAH 334 million was received from these premiums.
The total amount of funds insurers placed in banks exceeded UAH 15.4 billion, or 65% of the funds of nonbank financial institutions deposited in banks.
Over UAH 6.5 billion, or 28% of the funds invested in this financial instrument by domestic enterprises (apart from banks) were invested by insurers in government domestic loan bonds.
Households of Ukraine in January-June 2018 concluded insurance contracts for a total amount of UAH 8.6 billion, which is 22.7% more than for the same period in 2017.
The volume of insurance premiums received by insurers with foreign capital in January-March 2018 amounted to UAH 6.783 billion, which is UAH 1.761 billion, or 35%, more than for the same period in 2017, Member of the National Commission for State Regulation of Financial Services Markets Oleksandr Zaletov has told Interfax-Ukraine. According to him, as of March 31, 2018 some 60 insurance companies with foreign capital were registered in the insurance market of Ukraine, which is 20.5% of all registered insurers (292). Of these, 49 insurance companies carry out risk types of insurance and 11 insurance companies provide life insurance services. At the same time, the share of foreign capital in the charter capital of 26 insurance companies is 100% (21 non-life and 5 life insurers).
Foreign capital in the charter capital of insurers as of March 31, 2018 amounted to UAH 12.364 billion, while a year earlier the figure stood at UAH 3.553 billion, or 28.7% of the total paid-up charter capital of insurance companies.
Insurance companies that carry out risk types of insurance made up UAH 3.1 billion of foreign capital, while life insurers had UAH 452.6 million. The largest share in total foreign capital is made up by the capital of Cyprus (45.5%), Austria (15.9%), France (4.9%), Britain (3.4%), the United States (2.9%), the Netherlands (2.2%), and Bulgaria (2%).
