NBU predicts growth of Ukraine’s insurance market to UAH 450-650 billion after EU accession
According to the NBU’s forecasts, Ukraine’s insurance market after the country’s accession to the European Union could increase its share in the economy from the current level of about 1% of GDP to 5-7%.
If the insurance market grows to UAH 70 billion in 2026, and Ukraine’s GDP is at UAH 9-10 trillion, then insurers can expect to receive UAH 450-650 billion in insurance premiums after Ukraine’s accession to the EU
According to NBU Chairman Andriy Pyshny, the Ukrainian insurance sector has already undergone significant cleansing and regulatory transformation. Now the market is beginning to attract the attention of international investors, and further approximation to European standards could dramatically increase its scale.
If the NBU’s forecast comes true, the volume of the Ukrainian insurance market could grow several times over the next five years. Such a scenario requires capital, investors, transparency, adaptation of legislation and clear rules of operation for new participants.
The NBU called on European partners to evaluate Ukrainian insurers more carefully. Companies that continued to operate during a full-scale war and fulfilled their obligations to clients have already proven operational stability and the ability to work in crisis conditions.
The insurance market of Ukraine has undergone a deep transformation over the past three years and has reached a level that already allows attracting international capital even in war conditions.
We have managed to get rid of the burden of systemic problems and bring the market to a level where foreign investors are ready to invest in Ukrainian insurance companies
The key indicator of market maturity is the quality of its participants, says Pyshny. “This is already a mature market, and its participants are real and motivated, ready for a new philosophy of interaction.”
The Chairman of the National Bank emphasized that “the insurance market has been almost completely cleared of scheme and fraudulent institutions, and fictitious reinsurance has stopped.”
Almost 100% of insurers have a transparent ownership structure and a proper business reputation, and about 90% of their assets are concentrated in highly liquid instruments.
“The insurance penetration rate has increased to 0.81% of gross domestic product for the first time since 2022,” the NBU Chairman noted.
The National Bank notes that the Ukrainian insurance market is already coming into the sights of international players. Investment deals are taking place on the market, and during this and next year the regulator expects new entries from foreign companies.
But not everything is so clear on the market, the American Metlife announced its exit from the Ukrainian insurance market and the sale of its subsidiary life insurer Metlife to the Polish PZU. There were also rumors on the market about the acquisition of the Ukrainian insurer VUSO by the investment company Dragon Capital.
While Ukraine is not a member of the EU, foreign insurers cannot operate in the country directly through representative offices. To enter the market, they need to buy a local insurance company or create a new legal entity. After joining the EU, Ukraine must open the market to European players within the rules of the single European market.
The NBU compares the reform of the insurance sector with the transformation of the banking system after 2014. At the same time, the insurance market is going through this process more calmly, without large-scale bankruptcies, high-profile crises and sharp public outcry.
According to the National Bank, the banking sector of Ukraine already complies with European regulatory requirements by about 78%. For the insurance market, the compliance level is about 55%. It is this gap that determines the scope of further reforms in insurance.
European integration can become a strong catalyst for growth for the industry. In EU countries, insurers play the role of large institutional investors, accumulating long-term financial resources and investing them in infrastructure, business, housing construction and economic recovery.
For Ukraine, the growth of the insurance market to 5-7% of GDP will mean broader protection of citizens and businesses, greater long-term investment resources and an additional financial instrument for post-war reconstruction.
Earlier, Andriy Pyshny noted that Ukraine is accelerating the reform of the banking and insurance sectors to approach European Union standards by 2028, despite the challenges of wartime. Such changes should strengthen investor confidence and contribute to deeper economic integration with the EU.
The European Union has officially launched negotiations on Ukraine’s accession, opening the first of six negotiation clusters, which covers the issues of the judiciary, the rule of law, public procurement and financial control. Ukraine expects to open the following areas of negotiations this summer.
The NBU Chairman said that the country is implementing a large-scale European integration program and does not consider the war as a reason for slowing down reforms.
According to him, the Ukrainian banking system has successfully weathered economic shocks, power outages, and cyberattacks following Russia’s full-scale invasion in February 2022. Today, banks remain profitable, liquid, and well-capitalized, and the level of problem loans has has approached historical lows.
The NBU is actively implementing reforms necessary for integration into the European financial and insurance space.
The level of harmonization of banking regulation with EU requirements has already reached about 78%, while before the start of the full-scale war this figure was approximately 50%. The insurance sector is still lagging behind. Its level of compliance with European standards is estimated at approximately 55%.
According to Pyshny, the National Bank is conducting a large-scale transformation of the insurance market, which should increase transparency, financial stability and investment attractiveness of insurers.