Business news from Ukraine

INSURERS OF UKRAINE INCREASE COLLECTION OF PREMIUMS BY QUARTER

Ukrainian insurance companies in January-June 2021 collected net premiums in the amount of UAH 23.480 billion, which is 25.6% more than in the same period of 2020 (UAH 18.688 billion), according to the website of the National Bank of Ukraine (NBU).
According to the regulator, the volume of gross insurance premiums collected by insurers over the specified period amounted to UAH 24.780 billion, which is 17.9% more than in the first half of 2020 (UAH 21.008 billion). Including premiums received from individuals amounted to UAH 12.944 billion (a rise of 35%), from reinsurers – UAH 1.646 billion (8.9% less).
In the six months ending June 2021, insurers paid out UAH 8.552 billion of net insurance payments, which is 28.8% more than in the first half of the year earlier (UAH 6.642 billion). The level of net payments grew from 35.5% to 36.4%.
Gross insurance payments rose by 27.3%, to UAH 8.703 billion. The level of gross payments increased from 32.5% to 35.1%. Of the total volume of gross payments, payments to individuals amounted to UAH 4.235 billion (a rise of 35.3%), to reinsurers – UAH 136.6 million (42.5% less).
The volume of insurance payments belonging to reinsurers, according to the results of the first half of the year, amounted to UAH 4.661 billion, which is 11.2% more than in the same period a year earlier, including UAH 2.729 billion to nonresident reinsures (a rise of 41.1%).
As of June 30, 2021, the assets of Ukrainian insurers on the balance sheet amounted to UAH 65.186 billion, while on the same date a year earlier – UAH 61.888 billion. The volume of assets determined by legislation to represent insurance reserves decreased by 17.3% to UAH 45.995 billion.
The regulator also said that in the first half of the year, the volume of formed insurance reserves grew by 11.7%, to UAH 35.031 billion. The volume of paid charter capital fell by 6.6%, to UAH 8.966 billion.
In the reporting period, 63.170 million insurance contracts were concluded (a rise of 9.1%).
According to the NBU, the total number of insurance companies in Ukraine as of June 30, 2021 was 181, while on the same date a year earlier it was 215, including 19 (20) life insurers. At the same time, 166 insurance companies submitted reports on their activities to the regulator.

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MTIBU MEMBER INSURERS RAISE OSAGO AGREEMENTS BY 7.7% IN Q1

Insurance companies that are members of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) in January-March 2021 increased the collection of insurance payments under the policies of compulsory insurance of land vehicle owners’ civil liability (OSAGO) by 13% compared to the same period in 2020, to UAH 1.670 billion, including under electronic contracts in the amount of UAH 744.4 million, which is 65.2% more than in 2020.
During this period, the companies entered into 1.913 million OSAGO agreements, which is 7.7% more than in the same period in 2020. Out of the total volume of agreements, some 877,743 were concluded in electronic format, which is 62.6% more than in the three months of 2020.
According to the data published on the MTIBU website, the total amount of accrued insurance claims under internal insurance agreements in January-March 2021 increased by 26%, to UAH 862 million. In particular, UAH 162.3 million was paid using the European road accident record forms, which is 32% more than in 2020.
The bureau also recorded an increase in the number of settled claims for insurance compensation by 14%, to 42,763, including with the use of European road accident record forms 15,450 (more by 18%).
The MTIBU is the only association of insurers that provides compulsory insurance of land vehicle owners’ civil liability for damage caused to third parties. The bureau members are 48 insurance companies.

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MTIBU MEMBER INSURERS RAISE PREMIUMS – BY 7.4% IN 2021

Insurance companies that are members of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) in January-February 2021 signed 1.159 million contracts of compulsory insurance of land vehicle owners’ civil liability (OSAGO), which is 2% more than for the same period a year earlier.
According to the data published on the MTIBU’s website, out of the total volume of contracts, 528,400 were concluded in an electronic format, which is 56.8% more than in the two months of 2020.
The members of the bureau increased the collection of insurance premiums under OSAGO policies by 7.4% compared to the same period last year, to UAH 899.7 million, including under electronic contracts – in the amount of UAH 450.9 million, which is 60.4% more than a year earlier.
The total amount of accrued insurance claims under internal insurance contracts in January-February 2021 increased by 18.8%, to UAH 538.4 million, including UAH 99.9 million paid using European road accident record forms, which is 18% more than a year earlier.
The bureau also recorded an increase in the number of settled claims for insurance compensation by 4.8%, to 26,400, including with the use of European road accident record forms – 9,529 (more by 6.2%).
The MTIBU is the only association of insurers that provides compulsory insurance of land vehicle owners’ civil liability for damage caused to third parties. The bureau members are 48 insurance companies.

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UKRAINIAN INSURERS INCREASE PREMIUMS BY 20% IN 2020

Insurance companies that are members of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) in 2020 signed 8.334 million contracts of compulsory insurance of civil liability of land vehicle owners (OSAGO), which is 4.1% more than in 2019.
According to data posted on the website of the bureau, out of the total volume of contracts, 3.096 million were concluded in electronic format, which is 2.6 times more than in 2019.
The members of the Bureau increased the collection of OSAGO insurance premiums by 20.6% compared to the same period last year, to UAH 6.137 billion, including via signing electronic policies in the amount of UAH 2.584 million, which is 2.8 times more than a year earlier.
The total amount of accrued insurance claims under internal insurance policies in 2020 grew by 12.9% – to UAH 2.852 billion, including UAH 503.2 million paid using European accident report forms, which is 12.4% more than a year earlier.
The bureau also recorded an increase in the number of settled claims for insurance compensation by 5.4%, to 147,200, of which 50,300 (a rise of 5.8%) using European accident report forms.
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. It has 49 members.

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INSURERS OF UKRAINE CUT COLLECTION OF PREMIUMS BY 7%

Ukrainian insurance companies collected net premiums in the amount of UAH 18.688 billion in January-June 2020, which is 7.1% less than in the same period a year earlier (UAH 20.121 billion), according to a posting on the website of the National Bank of Ukraine (NBU).
According to the regulator, the volume of gross insurance premiums collected by insurers for the specified period amounted to UAH 21.008 billion, which is 23% less than in the first half of 2019 (UAH 27.291 billion). Of these, premiums received from individuals amounted to UAH 9.589 billion, from reinsurers – UAH 1.806 billion.
According to the NBU, in January-June 2020, insurers paid out UAH 6.642 billion of net insurance payments in claims, which is 1.7% more than in the first half of the year earlier (UAH 6.527 billion). The level of net payments increased from 32.4% to 35.5%.
Gross insurance payments increased by 2.3% to UAH 6.833 billion. The level of gross payments increased from 24.4% to 32.5%. Of the total volume of gross payments, payments to individuals amounted to UAH 3.129 billion, to reinsurers – UAH 237.7 million.
According to the NBU, the volume of insurance payments belonging to reinsurers in the first half of the year amounted to UAH 4.191 billion, of which UAH 1.934 billion to nonresident reinsurers.
As of June 30, the assets of Ukrainian insurers on the balance sheet amounted to UAH 61.888 billion, while on the same date a year earlier they were UAH 65.265 billion. The volume of assets determined by legislation to represent insurance reserves increased by 30%, to UAH 55.592 billion, while the volume of paid charter capital decreased 17.3%, to UAH 9.599 billion.
The regulator also said that during the specified period, the volume of formed insurance reserves increased by 8%, to UAH 31.359 billion.
In this period, 57.897 million insurance contracts were signed.
According to the NBU, the total number of insurance companies in Ukraine as of June 30, 2020 was 215, while on the same date a year earlier there were 249 companies, including 20 (26) life insurance companies.

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LEVEL OF CAPITAL DECLARED BY MANY UKRAINIAN INSURERS OVERESTIMATED

The level of capital declared by many insurance companies is overestimated, and financial stability indicators are not true, according to the Financial Stability Report of the National Bank of Ukraine (NBU) published on Wednesday.
According to the report, the central bank is concerned about most of the requirements to reinsurers. At the same time, about a third of the premiums were transferred to insurers whose solvency is uncertain, which means that the probability of receiving reimbursement is small.
In addition, some insurance companies hold funds in bank accounts exclusively for reporting on quarterly dates. After that, the funds from the accounts are transformed into other assets. Of 150 financial institutions analyzed, similar behavior is characteristic of more than half of the companies. But in general, their deposits in banks make up less than 20% of the total deposits of insurers.
The NBU said that insurance companies need high-quality and liquid assets in order to make insurance payments on time. Such assets, in particular, are government bonds and funds in deposit accounts. At the same time, many insurers invest in illiquid assets which real market value is impossible to establish – capital of enterprises, shares and investment certificates. The income from such assets declared in their financial statements averages less than 5% per year, which is significantly lower than the current profitability of deposits or government bonds, and it is almost impossible to turn them into liquid assets. Some of the securities are seized or their circulation is stopped. Another significant component of the assets of a number of companies – accounts receivable – often in practice has no market value.
According to the regulator, the insurance market requires a fundamental change in the rules of the game, since its development is constrained by imperfect regulation, which in many aspects is not consistent with the Insurance Core Principles of the International Association of Insurance Market Supervisors (IAIS) and the European Solvency directive. Consumers should receive additional guarantees that their rights will be protected, and they will receive insurance indemnities on time and in full, the central bank said.
“The priority for the NBU will be to strengthen the financial stability of insurance companies, introduce the best corporate governance practices and internal supervision systems, respond in advance to financial problems and violations of the protection of the rights of consumers of financial services,” the NBU said.

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