Finance

Limit

Insurance companies backed by Russian capital gave way to European companies

Insurance companies backed by Russian capital gave way to European companies
Photo: Alexey Solodunov

Many major insurance companies backed by Russian capital reduced premiums in the first half of 2014, while the majority of daughter companies of European players registered a noticeable increase in premiums, the League of Insurance Organizations of Ukraine (LIOU) told Capital.

“On the basis of analysis of reports of insurance companies I can say that Austrian and German companies gained the most in the first half year from the redistribution of the volumes of received premiums, while many leaders on the market backed by Russian capital lost a share of the market,” President of LIOU Oleksandr Zaletov noted.

Lost and found

The first half of the year was unsuccessful for such companies as INGO Ukraine, which lost 15% of the volume of premiums compared to the same period in 2013. The Providna Company lost 7.5% and Prosto-Strakhuvannya – 3%. Experts explain the reduction of premiums of these insurance companies by image risks as their investors are Russian. “They most likely suffered due to the general boycott of Russian goods and services by Ukrainians,” says CEO of the Knyazha company Dmytro Hrytsuta.

The situation with several companies backed by Ukrainian capital is no better. Such companies as Aska showed losses from premiums of 31%, Oranta (22.5%), Kraina (21.5%), Ukrainian Fire Insurance Company (21.5%) and Dominanta (15%). “Companies that had strong positions in the south and east of Ukraine, including insurance companies that in the past took advantage of administrative resources, suffered the most,” Hrytsuta presumes.

The owner of the Ukrainian Fire Insurance Company Oleksandr Mykhailov confirms Hrytsuta’s statement: “Without a doubt, the situation in Crimea and Donbas had a major impact on the operation of the company as it held strong positions in those regions. But the actions of the regulator had an even greater impact when due to the presence of a provisional administration in the company for drummed up reasons we lost accreditation with banks for nearly half a year,” Mykhailov underscored. He believes that insurance companies, particularly domestic ones, today need the support of the state.

Nonetheless, according to the data of the LIOU, many Ukrainian insurance companies without any privileges managed to increase their premiums in the first half year. Among them are NaftoGazStrakh (+55.5 %), «Salamandra-Ukraina (+41 %), the Illyichivske Insurance Association (+29 %) and Persha (+16.5 %).

“It doesn’t take much to attract clients and increase premiums: all you need to do is develop a system of quality service and pay indemnities on time,” assures Director of Ilyichevske Yuriy Hryshan. Even the active presence in the Donetsk oblast did not prevent the company from increasing premium fees. “Albeit the premiums dropped by a third in the Donetsk oblast,” he admitted.

The European choice

The premiums of many insurance companies backed by European capital also increased in the first half year, particularly the Ukrainian affiliates of the Austrian insurance group UNIQA and Vienna. The receipts from premiums of UNIQA increased by 28% and the receipts of the Knyazha, Globus and the Ukrainian Insurance Group owned by the Vienna Insurance Group – by 28%, 13% and 12% respectively.

The companies backed by German capital Allianz Ukraina, HDI Insurance and European Tourist Insurance showed good indicators. The premiums of the first company grew 31%, the second - 9.5% and the third - 5%. The affiliate company of the Polish PZU in Ukraine also showed a growth of 13.5 % in premiums.

“The positive growth dynamics of insurance companies backed by European capital, in my opinion, is associated with Ukraine’s European choice at large. Many clients believe that such structures are more reliable and responsible, which is why companies backed by Ukrainian capital must try hard to retain a share of the market,” Hryshan added. If the situation doesn’t change, insurance companies predict a change in the top 10 of the market by the end of the year with insurers backed by European capital replacing Ukrainian and Russian companies.

Comments (0)
In order to post comments, you must login.
Guest
advertisement
advertisement