Results of the insurance market of Ukraine. Insurance TOP identified the leading insurers for 1Q 2024
The insurance market of Ukraine continues to grow, showing positive trends in 2024 and improving financial results of insurers, despite the war in Ukraine. Forinsurer analyzed the Insurance TOP magazine report for January-March 2024 and selected the most important.
Increase in gross insurance payments, according to preliminary data, to UAH 11.7 billion, including risk insurance from UAH 9 billion to UAH 10.4 billion (+15.5%) and life insurance from UAH 1.1 billion up to UAH 1.3 billion (+18%), a high level of payments at the level of 37% and positive financial results testify to the stable development of the national market.
There was growth in the auto insurance, personal insurance, property insurance and liability insurance sectors. Reinsurance indicators remain at a stable level, which indicates an increase in self-retention by insurers and limited reinsurance capacities on the market due to strict underwriting and “caution” of international reinsurers regarding risks from Ukraine.
In general, the insurance market in Ukraine continues to gradually grow and strengthen its position after the “shock” of 2022-2023, providing an appropriate level of customer service and reliability of insurance services against the background of reduced insurance coverage and limited risks, a shortage of employees and difficulties for uninterrupted work due to systematic power outages and constant shelling by the Russian regime of Ukrainian cities.
The number of insurance market participants
As of July 19, 2024, the number of participants in the insurance market of Ukraine decreased to 73 risk insurers engaged in non-life insurance (as of June 30, 2024, there were 78 insurance companies, as of May 30, 2023 – 115 insurance companies), 11 life insurers, one insurer with a special status – EKA, 40 insurance brokers.
Recently, there has been a lot of news about the NBU’s approval of the voluntary exit of certain insurance companies. These are usually small companies with an unstable business model and those who consciously understand that they will not be able to fulfill the new requirements, therefore they decide to stop such activities, the NBU notes.
But there may also be involuntary exits from the market. “There will still be a certain number of insurance companies that, most likely, will leave the market according to the decision of the National Bank. Unfortunately, they still exist, and the NBU will make such decisions in principle,” the Regulator explained.
The number of insurance brokers and intermediaries will also decrease. The requirements established by the NBU will lead to the fact that only those intermediaries who directly perform the function of concluding insurance contracts will remain.
Insurance payments and dynamics
As of March 31, 2024, the volume of insurance payments for risk insurance and reinsurance of Insurance TOP participating insurers, which have a market share of over 87%, amounted to UAH 8,969 million. Compared to March 31, 2023, when this indicator was UAH 7,315 million, the increase was 22.6%.
Net insurance payments increased by 26.50% and amounted to UAH 7,825 million (vs. UAH 6,185 million as of March 31, 2023). Direct insurance premiums increased by 22.63% to UAH 8,914 million (versus UAH 7,269 million in 2023).
The share of insurance payments due to reinsurers amounted to UAH 1,144 million as of March 31, 2024, which is 12.76% of the total amount of insurance payments. This indicator reflects the degree of transfer of risks by insurers to reinsurers.
The total amount of insurance payments for life insurance in the 1st quarter of 2024 amounted to almost 1 billion UAH, which is 21.32% more compared to the 1st quarter of 2023 (822 million UAH). Compared to 2022 (882 million UAH), there is a decrease of 6.88%.
Market structure by types of insurance
The structure of payments by type of insurance is as follows:
- Personal insurance (except life insurance) – UAH 1,852 million
- Property insurance – UAH 3,585 million
- Liability insurance – UAH 3,384 million
- Other insurance (including assistance) – UAH 148 million
The amount of health insurance payments (except medical insurance) amounted to UAH 347 million, which is 3.93% of the insurer’s portfolio. The amount of insurance payments amounted to UAH 64 million, the level of payments – 18.49%.
Medical insurance brought UAH 1,505 million, which is 17.08% of the insurer’s portfolio. The amount of insurance payments amounted to UAH 855 million, the level of payments – 56.84%.
Mandatory civil liability insurance of car owners (Osatsv) collected UAH 1,772 million, which is 20.12% of the insurer’s portfolio. The increase in insurance payments amounted to 32.55%, and the amount of insurance payments – 1,083 million UAH.
The green card collected UAH 1,139 million, which is 19.30% of the insurer’s portfolio. The increase in payments amounted to 1.82%, and the amount of payments – 517 million UAH, the level of payments – 45.37%.
The amount of insurance payments for CASCO amounted to UAH 2,599 million, which is 29.22% of the insurer’s portfolio. The increase in payments amounted to 30.57%, the amount of payments – 1,272 million UAH, the level of payments – 48.94%.
Insurance benefits and level of benefits
The total amount of insurance payments for insurance and reinsurance as of March 31, 2024, amounted to UAH 4,168 million (the share of TOP20 SCs in the market is 85% of the total amount of payments on the market).
In terms of types of insurance, payments were distributed as follows: personal insurance (except life insurance) – UAH 919 million, property insurance – UAH 1,472 million, liability insurance – UAH 1,700 million, other insurance – UAH 76 million.
In terms of types of insurance, payments were distributed as follows:
- Personal insurance (except life insurance) – UAH 919 million
- Property insurance – UAH 1,472 million
- Liability insurance – UAH 1,700 million
- Other insurance (including assistance) – UAH 76 million
The level of payments as of March 31, 2024 was 46.47%, which is 36.47% more compared to the same period last year (37.23%). This indicates an increase in payments by insurance companies, which is associated with an increase in the number of insurance cases and an increase in the liability of insurers.
Assets of insurers
As of March 31, 2024, the total assets of insurance companies of Ukraine amounted to UAH 36,238 million. Assets include fixed assets in the amount of UAH 1,712 million, long-term financial investments in the amount of UAH 5,264 million, current financial investments in the amount of UAH 11,053 million, cash and their equivalents in the amount of UAH 5,065 million, as well as other assets in the amount of UAH 13,144 million UAH This testifies to the diversified structure of insurers’ assets, which ensures the stability and liquidity of their activities.
Equity
The equity capital of insurance companies as of March 31, 2024 amounted to UAH 13,392 million, which is 36.96% of the total currency of the balance sheet. The paid-up authorized capital is UAH 2,888 million.
Compared to the same period last year (11,317 million UAH), the increase in equity amounted to 18.34%. This testifies to the financial stability and growth of the capital base of insurers.
Guarantee fund
As of March 31, 2024, the guarantee fund of insurance companies amounted to UAH 10,924 million. It includes additional capital in the amount of UAH 2,845 million, reserve capital in the amount of UAH 586 million, and retained earnings in the amount of UAH 7,494 million.
This ensures a high level of financial reliability and the ability of companies to fulfill their obligations to policyholders.
The financial result of the insurance market of Ukraine for the 1st quarter of 2024 amounted to UAH 632 million, which indicates the positive financial activity of insurers during this period.
Insurance reserves
At the end of the first quarter of 2024, insurance reserves of insurance companies amounted to UAH 20,878 million, which is 2.33% more compared to UAH 20,402 million as of March 31, 2023.
The level of coverage of net insurance reserves by investment assets and monetary assets was 1.11, and the ratio of coverage with own funds was 0.64. This indicates a sufficient level of reserves to cover insurance obligations and a high level of financial stability.
Structure of regions
The total volume of insurance premiums received by regional divisions of insurers in 24 regions of Ukraine in the 1st quarter of 2024 amounted to UAH 4,725 million.
The largest share of insurance premiums (2,528 million UAH) was collected by Kyiv and the Kyiv region, which is 53.49% of the total volume of premiums in the country. Kyiv and the region are the largest regions, far ahead of other regions.
The share of the leading insurer in Kyiv – ARX – is 25.81% of the total volume of premiums in this region. In other regions, there is also a concentration of premiums among several leading companies, such as SG TAS, Knyazha, Arsenal Strahuvaniya and ARX.
The structure of the insurance market indicates a significant concentration of insurance services in Kyiv and several large regions, which is characteristic of many countries with a developed insurance market.
Analysis of the insurance market in the regions
- Kyiv and Kyiv region – UAH 2,528 million in premiums, 53.49%. The company ARX leads with UAH 653 million, which is 25.81% of the volume of premiums in the region.
- Vinnytsia region – UAH 134 million in insurance premiums, which is 2.84% of the total volume of premiums. The leader in the region is the Knyazha company, which collected UAH 32 million, which is 23.60% of the total amount of premiums in the region.
- Volyn region – UAH 110 million in premiums, 2.33%. The leader here is the SG TAS company with UAH 57 million, which is 51.55% of the premiums in the region.
- Dnipropetrovsk region – UAH 250 million, 5.29%. Arsenal Insurance Company leads with UAH 73 million, which is 29.36% of the volume of premiums in the region.
- Donetsk region – UAH 13 million in premiums, 0.28%. SG TAS is leading here with UAH 9 million, which is 67.69% of the volume of premiums in the region.
- Zhytomyr Region – UAH 86 million in premiums, 1.82%. The leader is SG TAS with UAH 47 million, which is 55.12% of the premiums in the region.
- Transcarpathian region – UAH 108 million in premiums, 2.29%. The SG TAS company leads with UAH 35 million, which is 32.59% of the volume of premiums in the region.
- Zaporizhzhia region – UAH 130 million premiums, 2.75%. Arsenal Insurance Company leads with UAH 53 million, which is 40.46% of the volume of premiums in the region.
- Ivano-Frankivsk region – UAH 111 million in premiums, 2.35%. The leader is SG TAS with UAH 48 million, which is 43.24% of the volume of premiums iy in the region.
- Kirovohrad region – 45 million UAH premiums, 0.95%. The leader is SG TAS with UAH 16 million, which is 34.44% of the volume of premiums in the region.
- Luhansk region – UAH 1 million premiums, 0.03%. SG TAS is leading here with UAH 1 million, which is 91.67% of the volume of premiums in the region.
- Lviv region – UAH 331 million in premiums, 7.01%. Knyazha’s company leads with UAH 102 million, which is 30.94% of the volume of premiums in the region.
- Mykolaiv region – UAH 81 million in premiums, 1.71%. The leader is SG TAS with UAH 41 million, which is 50.99% of the premiums in the region.
- Odesa region – UAH 249 million in premiums, 5.27%. Knyazha’s company leads with UAH 80 million, which is 32.29% of the volume of premiums in the region.
- Poltava region – 110 million UAH premiums, 2.33%. The leader is the company ARX with UAH 31 million, which is 28.45% of the volume of premiums in the region.
- Rivne region – 72 million UAH premiums, 1.52%. The SG TAS company leads with UAH 24 million, which is 33.47% of the volume of premiums in the region.
- Sumy region – UAH 97 million in premiums, 2.05%. The leader is SG TAS with UAH 15 million, which is 14.95% of the premiums in the region.
- Ternopil region – UAH 97 million in premiums, 2.05%. The SG TAS company leads with UAH 54 million, which is 55.31% of the volume of premiums in the region.
- Kharkiv region – UAH 133 million in premiums, 2.82%. Arsenal Insurance Company leads with UAH 39 million, which is 28.95% of the volume of premiums in the region.
- Kherson region – UAH 9 million premiums, 0.19%. ARX is the leader with UAH 2 million, which is 26.67% of the premiums in the region.
- Khmelnytskyi region – UAH 93 million in premiums, 1.97%. The SG TAS company leads with UAH 47 million, which is 50.97% of the premiums in the region.
- Cherkasy region – UAH 87 million in premiums, 1.84%. The leader is SG TAS with UAH 30 million, which is 34.14% of the volume of premiums in the region.
- Chernivtsi region – UAH 59 million premiums, 1.25%. The Knyaz company leads with UAH 16 million, which is 26.61% of the premiums in the region.
- Chernihiv region – UAH 56 million in premiums, 1.18%. The leader is SG TAS with UAH 23 million, which is 41.07% of the premiums in the region.
In general, the insurance market in Ukraine continues to gradually grow and strengthen its position after the “shock” of 2022-2023, providing an appropriate level of customer service and reliability of insurance services against the background of reduced insurance coverage and limited risks, a shortage of employees and difficulties for uninterrupted work due to systematic power outages and constant shelling by the Russian regime of Ukrainian cities.