The insurance market continues to be operational. Most insurers have arranged their operation by evacuating employees to safer regions, ensure remote work conditions, preserve technical facilities, and databases. These findings were collected by the survey conducted by the National Bank of Ukraine in March 2022. At the same time, insurance companies are facing major challenges.
Nonlife insurance market
Today, the nonlife insurance market comprises 132 insurance companies. Whereof 25 insurers accounting for 9% of the market failed to provide responses regarding operation in wartime. 17 insurers (less than 2% of the market) reported that at the time of the survey they have not yet arranged the insurance payouts.
All other insurance companies, accounting for 89% of the market, reported business continuity, full and timely discharge of liabilities under insurance agreements, and even entering into new agreements.
According to 42% of respondents, insurers are facing issues with complete and timely submission of financial statements. 25 insurers, accounting for 10.5% of the insurance market, report challenges with ratio compliance. Whereof seven largest businesses (8.9% of the market) had difficulties complying with ratios in 2021 even before the escalation of war.
Financial capability of insurers during the war directly depends on the quality and structure of assets and a capital buffer before the full-scale invasion.
At the same time, the survey has found that all companies are challenged by military actions in Ukraine. Thus, sales decreased significantly, especially on the account of retail channels, many customers have filed for postponement of regular payments and termination of insurance agreements.
Due to displacement, temporary occupation of territories, and destruction of real estate, the number of customer servicing centers is reducing. Arranging settlement of insurance cases is also a problem in regions of active warfare, as well as inspection of vehicles, receipt and proper drafting of original documents to be submitted to the insurer for insurance payment or calling the police to the accident site.
Life insurance market
Today, 13 life insurance companies operate in the insurance market. All these companies continue to operate, service customers, and deliver insurance payments.
At the same time, companies report a major decrease in insurance premiums and circumstances limiting their ability to operate, in particular, complications in arranging work and communications bertween staff members and difficulties in accessing the office and original documents. All the above hinders insurance payments, especially in the event of death of the insured person on the occupied territories.
“Regardless of the war, the insurance market continues to be operational. The NBU devotes its best efforts to preserve this trend. First of all, this can be accomplished by regular dialogue with the market participants and prompt response to their needs,” said Olha Maksymchuk, Director of the Nonbank Financial Services Supervision Department of the NBU.
The NBU surveyed 119 of 145 insurers registered in Ukraine as of 1 April 2022. These companies make up 82% insurers accounting for 91% of non-life insurance premiums and 100% of life insurance reserves.