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Ukraine Insurance Report Q2 2016

Ukraine Insurance Report Q2 2016

BMI View: The insurance market in the Ukraine is largely underdeveloped, with limited rates of bothpenetration (premiums against GDP) and density (premiums per capita). Several years of economic declineand political instability have impacted heavily upon household income levels, dampening demand for arange of insurance products, and while we expect the country to exit recession in 2016, growth expectationsremain tentative in light of the weak exports outlook and the reliance upon economic reform andaccompanying international financial support. The country's insurance market does offer substantial longtermgrowth potential, particularly as it is growing from such a small base, though it is unlikely to attractmajor foreign investment in the short-term in light of the poor operating conditions and market instability.

Key Updates And Forecasts

Italian bank UniCredit has agreed to sell its Ukrainian subsidiary to ABH Holdings, a subsidiary ofRussia's Alfa-Bank. Although mainly a financial services and banking provider, in Ukraine UniCreditalso has a small non-life insurance business providing motor, property, health and travel insurance.

The non-life market in the Ukraine is expected to record slow growth of around 2.5% annually, in localcurrency terms, between 2016 and 2020 leading to total premiums of UAH29.3bn by the end of thecurrent forecast period. The ongoing devaluation of the hyrvnia means the outlook is weaker in US dollarterms with premiums of USD1.2bn forecast for 2020, up from USD1.1bn in 2016.

The growth outlook is more positive in the life insurance sector, though we note that high inflation isdistorting growth rates. Overall, premiums are forecast to increase by over 14% annually over theforecast period, though again we note growth will be significantly slower in US dollar terms. By 2020 thelife sector is forecast to write premiums of UAH6.0bn (USD244m).

BMI Industry View
Table: Headline Insurance Forecasts (Ukraine 2013
Industry Forecast
Life Premiums Forecast
Table: Life Premiums (Ukraine 2013
Table: Life Insurance Claims (Ukraine 2008
NonLife Premiums Forecast
Table: Non
Life Premiums (Ukraine 20132020)
Table: Non
Life Insurance Claims (Ukraine 20092014)
Non Life SubSector Forecast
Table: Non
Life Insurance Premiums by Product Line (Ukraine 20132020)
Insurance Risk/Reward Index
Emerging Europe Risk/Reward Index
Table: Emerging Europe Insurance Risk/Reward Index
Market Overview
Life Market Overview
The Product Offering
The Competitive Landscape
Table: Life Market Shares (USDmn), 2010
NonLife Market Overview
The Product Offering
The Competitive Landscape
Table: Non
Life Market Shares (USDmn), 20102013
Company Profile
AXA Group
Vienna Insurance Group (VIG)
Industry Forecast Methodology
Risk/Reward Index Methodology
Table: Indicators
Table: Weighting of Indicators

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