Volodimir SHEVCHENKO, MTIBU General Director

1 September 2022 — Daniela GHETU
Volodimir SHEVCHENKO, MTIBU General Director
XPRIMM: In January-June 2022, the Ukrainian MTPL market has reduced by 13.4% in terms of premiums, and insurance companies - the MTIBU members have concluded 28.1% fewer insurance policies than in the same period of the previous year. Could you please comment on these figures - What factors did contribute to them?

Volodimir SHEVCHENKO: Starting from April 2022, we can see that the decline in the market indicators of MTPL has stopped. Thus, the number of policies concluded in 6 months amounted to 3.1 million pieces, having decreased by 28.1% compared to the same period of 2021. The gross premiums written amounted to UAH 2.9 bn (-13.4%).

MTPL's insurers settled 56.1 thousand claims (-33.5%) by making insurance payments and paid out over UAH 1.3 bn (-23.5%) to victims of traffic accidents.

The number of paid claims settled under the Europrotocol decreased by 27% to 22.2 thousand pieces.

The amount of compensation under the Europrotocol decreased by 15.5% to UAH 272.1 million. At the same time, the share of claims settled under the Europrotocol in the total number of paid claims increased to 40% (+4 p.p.), and in the total amount of paid claims was 20.6% (+2 p.p.).

The number of online MTPL-policies totalled 1.8 million pieces. Premiums on online insurance amounted to UAH 1.9 billion, which is 65% of total premiums. The share of online insurance in the total number of policies was 59%.

Key indicators of MTPL (internal policies) in Jan-Jun 2017-2022

The reasons are clear - some of the cars were physically destroyed or abandoned by their owners in the temporarily occupied territories. A significant number of Ukrainians took cars abroad as they were forced to flee the war. According to my estimates, the dynamics of MTPL segment decline generally correspond to these losses. That is, most car owners do not stop insuring with MTPL, and the decline is mainly due to a reduction in the number of cars in use in Ukraine. In a spring interview, Sandra Schwartz, the President of the Council of Bureaux (Green Card), estimated that the number of cars with Ukrainian registration abroad can be counted in the hundreds of thousands or even millions.

Policies and premiums have partially 'switched' from the MTPL segment to the Green Card segment, where the number of contracts and the amount of premiums have more than doubled (+119% and +105% respectively). And this is not just a recovery from the 'pandemic' decline in international insurance during 2020-2021, as the number of Green Card (international insurance) contracts in the first half of this year has almost reached the figures for the corresponding period in 2019, when there was significant growth due to the introduction of online insurance policy verifications.

Under Green Card contracts, 2,730 claims (+10%) amounting to EUR7.1 million (+19%) were settled during first half of 2022.

Key indicators of Green Card (international insurance) in Jan-Jun 2018-2022

XPRIMM: What do you think about the MTPL market's future?

V.S.: My forecast is cautiously optimistic. It is clear that the state of the MTPL market, like the Ukrainian economy, as a whole, will depend, first of all, on the war situation. I am sure that the MTPL market will begin to gradually recover as soon as hostilities end and Ukrainian car owners return back home.

The reason for optimism is that from the first day of the war the MTIBU and the MTPL insurers did not stop working to ensure that all road users had reliable insurance coverage.

We act with faith in victory: we see our task not only in maintaining the availability and continuity of the process of concluding contracts and making MTPL insurance payments in the war conditions, but also in developing the market and services for car owners. Several steps have been made in this direction.

First of all, at the request of the MTIBU, the National Bank of Ukraine decided to increase the insurance limit of coverage from July 1, 2022, up to -

  • UAH 160 thousand per victim for damage caused to property (before the changes, this amount was UAH 130 thousand);
  • UAH 320 thousand per victim for damage caused to life and health (before the changes, this amount was UAH 260 thousand).
Also, up to UAH 80 thousand, the limit of coverage was increased in the settlement of insurance events, registered without calling the police to the scene of the traffic accident, using the Europrotocol (before the changes, this amount was UAH 50 thousand). Increasing the maximum limit will allow more victims to file a traffic accident and receive a compensation without the need to call representatives of the National Police, who are often involved in the defense of the country during martial law, to the scene of the traffic accident.

Secondly, from September 1, insurers who are full members of the MTIBU will offer car owners the opportunity to conclude such contracts online.

The procedure for issuing a Green Card online is similar to the conclusion of an internal MTPL online contract. We hope that the implementation of such an innovation for international insurance will also be successful.

As far as the work of the MTIBU is concerned, we are working on the areas of improvement of operational activity that we started even before the war: optimizing the system of compensation from the Bureau's funds with the aim of enhancing the quality of service, improving the risk of management system of insurers who are members of the MTIBU, fighting against fraud in the MTPL field, innovative projects etc.