UKRAINE: Foreign reinsurers' premiums increased by more than 12.6% y-o-y in 1Q2020

3 June 2020 — Marina MAGNAVAL
In the first quarter 2020, Ukrainian insurers paid UAH 2.78 billion (~EUR 91.89 million) insurance premiums under risk reinsurance contracts, which is 37.4% less y-o-y, said Oleksandr ZALETOV, the member of the National Commission for the State Regulation of Financial Services Markets, Forinsurer reports.

As ZALETOV noted, even though in January - March 2020 the net premiums increased only by 1.8% y-o-y (to UAH 9.85 billion), the situation on the insurance market has changed. Lately, the cooperation of local insurers with international reinsurers has intensified, around UAH 884 million reinsurance premiums being paid to non-resident reinsurers, representing an increase of 12.6% y-o-y.

It is worth noting that in 1Q2020, reinsurance has been carried out mostly in the OECD member states, same as the year before. The most active cooperation in reinsurance field between Ukraine as cedant and other countries as reinsurers was seen with Germany (19.7% of the segment premiums), Austria (19.4%), the UK (14.6%), Poland (12.4%), France (7.2%), Switzerland (5.6%), Italy (3.9%), the Czech Republic (3.8%), the United States (3%) and Belgium (2.4%), the rest accounting for less than 2%.

On the paid claims side, in 1Q2020, foreign reinsurers paid UAH 473 million, which is 62.2% more y-o-y. The biggest shares fell on reinsurers originating in the Czech Republic (31.2%), Germany (24.3%), Poland (17.6%), the UK (9%), Austria (7.6%), France (2.4%), and Italy (2.4%).

The operations in the domestic reinsurance market significantly decreased during the first quarter of 2020. During this period, resident reinsurers received premiums in the amount of UAH 1.89 billion, which is 48.3% less y-o-y. This was driven by new requirements for the quality of insurers' assets, established in the amendments to the provision on mandatory criteria and standards for capital adequacy and solvency, liquidity, profitability, asset quality and riskiness of insurer operations, approved by the order of the National Commission, which entered into force on November 8, 2019.

*EUR 1 = UAH 30.2564 (01.04.2020, National Bank of Ukraine)

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