In January 2022, member insurance companies of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) concluded 590.5 thousand contracts of compulsory civil liability insurance of land vehicle owners (OSAGO), which is 1.04% more than in January 2021.
According to the data published on the MTIBU website, out of the total volume of contracts, 273.3 thousand were concluded in electronic form, which is 5.05% more than in the first month of 2021.
Members of the Bureau increased the collection of insurance payments under OSAGO policies by 16.68% compared to the same period last year – up to UAH 522.7 million, including for electronic contracts – in the amount of UAH 271.2 million, which is 23.16% more, than a year earlier
The total amount of accrued insurance claims under internal insurance contracts for January 2022 increased by 9.72% to UAH 287.2 million. Including UAH 57.4 million was paid using the Europrotocol, which is 19.3% more than a year earlier.
The Bureau also recorded an increase in the number of settled claims for insurance compensation by 4.93% – up to 13.461 thousand, including 5.221 thousand (+14.2%) using the “Europrotocol”.
MTIBU is the only association of insurers that provides compulsory insurance of civil liability of owners of ground vehicles for damage caused to third parties. Bureau members are 49 insurance companies.
Dynamics of balance of payments of Ukraine (USD mln)
NBU
Dynamics of balance of payments of Ukraine (USD mln)
NBU
The expenses of the Ministry of Finance of Ukraine under the “payments on value recovery instruments (VRI)” item in December 2021 amounted to UAH 4.635 billion, the State Treasury said in a report on the execution of the state budget on Friday.
According to the National Bank’s average official hryvnia-to-U.S. dollar exchange rate for December, this corresponds to about $170 million, which was probably used to buy out VRI on the market.
The Ministry of Finance did not comment on these December changes in the item of state budget expenditures to Interfax-Ukraine.
In total, over the past year, expenses under this item totaled UAH 5.633 billion, with an updated plan for the year of UAH 6.755 billion, while the original plan was UAH 1.155 billion.
Within its framework, in May, Ukraine, according to the Ministry of Finance, made the first payment on VRI issued as part of the restructuring of Ukraine’s public debt in 2015, which amounted to $40.751 million.
The May report of the State Treasury indicated the amount of expenses UAH 1.123 billion, but a month later it was reduced by 11%, to UAH 997.72 million, probably taking into account the partial buyout of about 11% of VRI by the Ministry of Finance in August 2020.
VRI were issued as part of the restructuring of Ukraine’s public debt in 2015 instead of eurobonds for a nominal amount of about $3.239 billion (20% of the restructuring volume) and are not part of the country’s public debt. Payments under VRI are made annually in cash in U.S. dollars, depending on the growth dynamics of Ukraine’s real GDP in 2019-2038, but after two calendar years, that is, between 2021 and 2040.
If GDP growth for the year is below 3% or real GDP is less than $125.4 billion, then there will be no payments on securities. If the growth of real GDP is from 3% to 4%, the payment on securities will be 15% the value of the GDP growth between 3-4%, and if it is higher than 4%, then 40% of the value of the GDP growth above 4% is paid. In addition, payments are capped at 1% of GDP from 2021 to 2025. The absence of any restrictions on payments after 2025 in the event of rapid GDP growth has been criticized by individual politicians and experts within the country.
Quotations of VRI in December fluctuated within 90.7% -95.3% of the nominal value – one of the lowest levels in the past year. At the same time, as a result of the escalation of the situation around Ukraine and the sale of Ukrainian assets caused by it, the value of VRI decreased in January 2022 and dropped to 66.7% of the nominal value this week. This is the lowest level since the beginning of the summer of 2019, not counting the short dip in value at the beginning of the COVID-19 pandemic. On Thursday, January 27, amid positive news, VRI rose by 9.4% to 73.5% of the nominal value.
Taking into account the quotes in December and the volume of expenditures made, it is possible to roughly estimate the volume of new purchases of VRI at about 5.7% of their total volume.
The growth of Ukraine’s GDP for 2021 is estimated by the National Bank of the country at 3%, which means no payments in 2023.
