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.
