STATISTICS: CIS INSURANCE IN 3Q2014: GWP down by 10% due to difficult international situation
Thus, GWP totaled EUR 17.7 billion, decreasing by 10.66% compared with previous year's same period (EUR 19.8 billion). The most significant fall in premium production was reported by two main markets in the CIS region, namely Ukraine and Kazakhstan.
In case of Russia, in the local currency market increased by 8%, but most of the local players spoke about "stagnation" rather than "growth" or "decrease". In fact, considering the last years' evolution, when double digit growth rates were usual, a less than 10% increase in GWP seems really modest.
The second largest CIS insurance market is Ukraine, where the gross written premiums volume reported by the local insurers in 3Q2014 amounted to UAH 15.5 billion, 27% less y-o-y. Due to the 52% depreciation of the local currency, Hryvnia, in relation with the Euro, the figures denominated in European currency show a lower rate by 52.02%, to EUR 947 million. Last year, the Ukraine insurance market as well as other sectors of the local economy were greatly affected by the political instability, foreign conflict, the annexation of the Crimea and military operations in the East. Due to the annexation of Crimea by Russia, Ukraine has lost 5% of its market. Also, the activity in the Donetsk and Luhansk regions has decreased. These regions represented about 15-18% of the total insurance premiums.
In January-September 2014 gross written premiums collected by Kazakh insurance companies decreased by -6.37% in local currency compared with the same period of 2013. Due to the devaluation of the local currency (KZT) operated by the National Bank of the Republic of Kazakhstan and the depreciation of the national currency to the Euro by more than 10%, the insurance market recorded a decline of 15.71% in the European currency.
The negative trend on the Georgian insurance market (which decreased by 44%) was driven by the lower premiums reported by the health insurance sub-sector: -65% to GEL 110.9 million (EUR 49.9 million), representing about 49% of the insurance market. At the end of September 2013, the same insurance class accounted for 78% of the total market. The main reason of this decline was the fact that, starting April 1st, 2014, the private insurance companies were completely removed from all the government's projects, including the universal healthcare program.
In case of Moldavian insurance market, in the first nine months of the last year, gross premiums written by the 16 insurance companies active on the Moldavian market totaled MDL 899.88 million, up by 3.31% in local currency. At the same time, in European currency, Moldavian insurers reported a decrease of 8.8%, to EUR 48.42 million due to the depreciation of the national currency by 14%.
The local experts estimated the situation on the Armenia insurance market as stagnating. One of the causes of stagnation was the government's decision to take a part of the social package of state employees, namely a significant share of these packages included in the compulsory health insurance, from insurance companies and to given to the Ministry of Health. Meanwhile, for the implementation of this social package, insurance companies spend considerable resources, such as building their own clinics and medical centers, in the hope that compulsory health insurance will become universal in 2015. The government changed its position, recalling the presence of numerous abuses in this sphere and the decline of the quality of health care.
Click here to download the 3Q2014 CIS Overall market data statistics.