XPRIMM: In the first half of the year, the MTPL market saw positive dynamics. How would you assess its development compared with previous years?

Vyacheslav CHERNYAKHOVSKY: I would be cautious describing the current dynamics as market development. Data for January–August 2026 show that the number of policies that came into force increased by 5.6%, from 4.79 million to 5.05 million units, while premiums rose by 8.5%, from UAH 14.8 billion (≈ EUR 307.5 million) to UAH 16.1 billion (≈ EUR 310.3 million). What matters is what drives this growth.

The average premium increased only slightly, from about UAH 3,093 (≈ EUR 64.3) to UAH 3,179 (≈ EUR 61.3), or by 2.8%. Average consumer price growth between the corresponding periods of 2025 and 2026 was about 7.8%. In comparable prices, therefore, the average premium actually fell by around 4.6%, while real growth in total premiums was below 1%. Thus, the main positive change in 2026 is the recovery in the number of policies after the 2025 pricing shock, rather than another sharp increase in the cost of insurance.

It is also important to compare the number of policies not only with 2025 but with 2024. Around 3.67 million policies were issued in 1H2024, and virtually the same number in 1H2026. In other words, the actual number of policies has barely increased over two years.

At the same time, total number of vehicles has changed. According to our estimates, Ukraine’s active vehicle fleet grew by around 508,000 vehicles between July 2024 and June 2026. The number of in-force policies did not increase proportionally. In practice, almost the entire increase in the vehicle fleet translated into additional uninsured vehicles, on top of those already being driven without MTPL coverage. As a result, MTPL coverage of the active vehicle fleet has not increased; it has declined. We estimate that about one fifth of active vehicles are currently not covered by MTPL.

For this reason, we consider the key indicator of MTPL market development to be not premium volume, but the share of active vehicle fleet with insurance coverage.

Based on trends over eight months of the year, it is also possible to cautiously estimate FY2026. If seasonality in the remaining months is broadly similar to 2025 and there is no new pricing shock, the year could end with around 7.8-7.9 million policies and approximately UAH 25 billion (≈ EUR 481.9 million) in premiums.

XPRIMM: The market has almost completed the transition to digital sales. In your view, how has the shift to electronic policies affected the MTPL market?

V.C.: I would separate two things here: the electronic policy and the distribution channel. Since 2026, MTPL policies have been issued almost exclusively electronically. By comparison, in 1H2024 around 75% of policies were electronic, and by the end of 2025 their share had exceeded 99%.

This is clearly a positive change. When a policy enters the centralised MTIBU database, it is easy to verify, counterfeit paper policies are virtually eliminated, and remote policy issuance, insurance verification and subsequent claims settlement become simpler.

However, electronic policy issuance does not mean that the market has shifted to direct online sales. According to NBU data, in 1Q2026 around two thirds of MTPL premiums were still generated through agency networks, while online aggregators accounted for about 15%. What has become digital first and foremost is policy issuance and registration, not the insurance distribution model itself.

Another important point is that digitalisation improves market infrastructure but does not really create additional insurance demand. In 1H2026 the number of policies merely approached the level of 2024.

XPRIMM: What was the situation with paid claims in the first half of the year? How is the use of the European Accident Statement affecting claim settlement?

V.C.: Claim payments are one of the most important indicators in 2026. In H1 insurers settled almost 95,000 claims - 31% more than a year earlier - while total amount paid rose by more than 95% to over UAH 5.6 billion (≈ EUR 110.0 million). The average claim payment increased from about UAH 40,000 (≈ EUR 820) to UAH 59,000 (≈ EUR 1,153).

The 2026 figures provide a clearer picture of the economical side of the new MTPL law. The 2025 figures were transitional for this comparison: premiums under the new tariffs were already being collected, while a substantial share of claim payments and reserves still related to claims from the old portfolio, with different limits of liability and indemnification rules.

The European Accident Statement has effectively become a mainstream claim settlement tool. In H1, almost 49,700 claims were settled using it – more than half of all paid claims. The number rose by 56%, while indemnities increased almost 2.8 times to UAH 2.13 billion (≈ EUR 41.6 million).

This is a natural result of removing the fixed indemnity cap for claims settled under the European Accident Statement and increasing the level of insurance coverage. For drivers, the procedure substantially simplifies reporting an accident, reduces the need for police attendance in straightforward cases and speeds up claim settlement. For insurers, it increases the importance of digital data verification and anti-fraud systems.

XPRIMM: What new products or regulatory developments in the market would you highlight in 1H2026?

V.C.: I would focus less on fundamentally new insurance products and more on the practical results of the MTPL market’s transition to the new model established by the law since 2025.

Since the beginning of 2026, MTPL policies have been issued almost entirely in electronic form. We can also now assess the effects of other important changes: direct claim settlement, abandonment of depreciation deductions for vehicle parts when calculating indemnity, abolition of the deductible, and removal of the fixed indemnity cap under the European Accident Statement. Their impact became fully visible in claim settlement statistics in 2026.

I would also highlight the development of the social discount system for MTPL. Pensioners and persons with disabilities in eligible categories, among others, are entitled to a 50% reduction of a policy price. For veterans, an additional mechanism applies: 50% of the policy cost is covered by the statutory discount, while the other half is reimbursed by the state. Several hundred thousand veterans have already used this mechanism.

Importantly, the process is largely automated through government e-services, which can retrieve the necessary data directly from the MTIBU Centralised Database. This is a good example of targeted social support that preserves the insurance mechanism itself and does not require citizens to go through a cumbersome procedure to prove eligibility for the benefit.

The next key issue is further alignment of MTPL limits of liability with EU requirements. In our view, this should be done in stages, taking into account actual loss experience, policy affordability, household incomes and the share of uninsured vehicles.

XPRIMM: The Green Card segment has recorded mixed trends, with premiums declining despite a slight increase in the number of policies. What is driving this segment?

V.C.: In 1H2026, around 661,000 Green Card policies were issued - about 1% more than a year earlier. Premiums, however, fell by 1.5% to UAH 2.58 billion (≈ EUR 50.4 million), mainly because the average premium declined by around 2.5% to UAH 3,900 (≈ EUR 76.2).

We can see a clearer picture if we compare to 2024: policy numbers remain almost 8% below 1H2024. The main structural factor is unchanged - the number of Ukrainian-registered vehicles that remain abroad on a long-term basis. Some owners are gradually switching to local registration and local insurance.

Premium volumes are also affected by policy duration, travel patterns, vehicle category, competition and exchange rates. As a result, policy numbers and premium volumes can move in different directions.

At the same time, Green Card claim payments remain substantial - around EUR 26.5 million for the half-year. Ukrainian insurers continue to fully meet their international obligations to victims in countries participating in the Green Card system.

XPRIMM: What trends do you expect to dominate the MTPL segment in 2H2026? Do you anticipate any major changes?

V.C.: After eight months of 2026, the main trends for the year are much clearer. I do not expect a repeat of the 2025 pricing shock. In January–August, policy numbers rose by 5.6% and premiums by 8.5%, while the average premium increased by only around 2.8%. Adjusted for inflation, this means the average policy cost actually fell in real terms.

Claims, by contrast, are changing rapidly. Over the first eight months, insurers settled 122,500 claims - almost 28% more - while accrued indemnities reached UAH 7.43 billion (≈ EUR 143.2 million). The average claim payment rose from about UAH 41,000 (≈ EUR 852) to UAH 61,000 (≈ EUR 1,176). The 2026 data reflect the economical effect of the new MTPL Law much better than the transitional 2025 statistics, when premiums under the new tariffs had already risen sharply but a substantial share of claim payments and reserves still related to the old portfolio.

One of the most visible positive outcomes of the new law is the improvement in claim settlement quality. Since the old approach of reducing compensation for damage to a vehicle by calculated depreciation of parts was abolished, the number of MTPL complaints has fallen to one of the lowest levels seen in many years. Previously, the gap between the actual cost of repair and the insurance indemnity was a recurring source of disputes with victims.

These changes also have spillover effects on other motor insurance segments. Higher MTPL limits of liability and a shift towards compensation based on the actual cost of a vehicle repair reduce the need for some car owners to buy simple Motor Hull products that previously served mainly to cover gaps in MTPL protection. This applies particularly to mini-CASCO and other low-cost products with a limited range of covered risks. Comprehensive Motor Hull insurance, which protects a policyholder’s own vehicle against a much broader range of risks, remains functionally different.

The role of the European Accident Statement also continues to grow: 63,700 cases were settled using it in January-August, already more than half of all claims. Removal of the former fixed cap made the procedure suitable for a much larger share of road accidents.

By year-end, I expect further normalisation in the relationship between premiums, claims and reserves, together with a relatively stable number of policies. If current trends continue, 2026 could end with around 7.8-7.9 million policies and approximately UAH 25 billion (≈ EUR 481.9 million) in premiums.

The main structural problem remains: policy numbers are not keeping pace with growth in the active vehicle fleet, leaving a significant number of vehicles without MTPL cover. Actual coverage of the active vehicle fleet, rather than nominal premium volume, should be the key indicator of market development.

The next major risk is further increases in MTPL limits of liability as part of alignment with EU requirements. This should be phased: first, the ultimate loss ratio under the new model and its impact on price and coverage need to be assessed; only then should the next increase in limits be introduced.

XPRIMM: What are the main legislative changes that the Ukrainian insurance market is likely to face in the near term?

V.C.: Over the next few years, the Ukrainian insurance market will be shaped to a large extent by the further implementation of EU insurance legislation. I would highlight three main areas - Solvency II, IDD and further alignment of MTPL with the Motor Insurance Directive.

The first major area is further implementation of Solvency II. This is not only about a new capital formula, but a comprehensive change in the approach to risk assessment, solvency, reporting and supervision. The National Bank of Ukraine has already announced its intention to conduct a Quantitative Impact Study (QIS), including calculating capital requirements under Solvency II and assessing potential additional capital needs for individual insurers. In our view, the QIS should not be a formality; it should provide the practical basis for calibrating the Ukrainian framework, setting transitional periods and applying the principle of proportionality.

The second major area is a new law on the distribution of insurance and reinsurance products, which the National Bank is preparing as part of the further implementation of the EU Insurance Distribution Directive (IDD). It will govern the activities of insurers, agents, brokers and other intermediaries, including authorisation, professional requirements, information provided to customers, distribution rules and the conclusion of insurance contracts. In March 2026, the National Bank officially stated that the relevant provisions of the current Law of Ukraine “On Insurance” are planned to be transferred to and further specified in a separate draft law.

The third area is further alignment of MTPL with the EU Motor Insurance Directive (MID). The new Law of Ukraine “On Compulsory Insurance of Civil Liability of Owners of Land Motor Vehicles” has already substantially changed the Ukrainian system and brought it closer to the European model, but the process is not yet complete. Further steps will include, among other things, minimum amounts of cover, protection of victims and effective enforcement of the requirement to maintain valid insurance.

The key issue for us is not that Ukraine should implement EU insurance legislation – that is a necessary part of European integration – but how it should be implemented. Our approach is straightforward: first quantify the economic impact, then define the requirement and a realistic transitional period, and only after that apply it in full.

If new regulation sharply increases capital requirements, operating costs or the price of insurance products, the effect is not only prudential; it can also affect competition, affordability and actual insurance coverage. Proportionality and ex ante impact assessment are therefore not a retreat from European standards, but a condition for implementing them properly.

XPRIMM: The Insurance Business Association has prepared its own Strategy for the Development of the Insurance Market through 2030. How does its approach differ?

V.C.: The Insurance Business Association has prepared the “Comprehensive Strategy for the Development of the Insurance Market of Ukraine through 2030”. The main difference in our approach is that we do not treat premium growth as a sufficient indicator of market development.

Premiums can increase because of inflation, higher tariffs, higher sums insured or regulatory changes. If the number of citizens, vehicles, businesses or property actually insured does not increase at the same time, it is difficult to describe that as full-fledged market development.

Our objectives are therefore built around actual insurance protection. For MTPL, the key metric is the share of the active vehicle fleet covered by insurance. For voluntary health insurance, it is the number of insured persons. For Motor Hull, it is the number of in-force policies. Similar physical indicators are used for household and business property insurance and long-term life insurance.

The Strategy is more than a narrative document. We have prepared an integrated package comprising the Strategy itself, Analytical Annexes, an economic model and a Roadmap. It covers six strategic priorities, ten priority reforms and 28 thematic sections.

Key areas include MTPL, voluntary health insurance, Motor Hull, savings and corporate life insurance, property insurance for households and businesses, war-risk insurance, reconstruction, development of reinsurance capacity, tax policy, competition and proportionate implementation of EU requirements.

Under the baseline trajectory, we estimate that by 2030 the insurance market could reach around UAH 144.4 billion in nominal terms, or UAH 103.2 billion in 2025 prices. This figure is not a goal in itself. We do not view nominal growth without broader actual insurance coverage as a success.

For example, the goal of MTPL is not simply a higher premium volume but valid coverage for at least 90% of the active vehicle fleet. The baseline trajectory envisages around 2.1 million people covered by voluntary health insurance, around 550,000 in-force Motor Hull policies, and around 180,000 employees – approximately 2% of employees – covered by corporate savings life insurance.

The Strategy also provides for an annual review of actual outcomes. If a critical reform is not launched or economic conditions change, the projected effect should not simply remain in the model – the trajectory must be recalculated.

In our view, this approach transforms a strategy from a set of aspirational indicators into a management framework for market development, in which each major reform is linked to a specific economic outcome and measurable insurance protection.

Note: All UAH→EUR conversions use the official NBU exchange rate at the end of the relevant reporting period

Interview conducted by Marina MAGNAVAL