Thanks to the indicators of the insurance market activity for the first half of 2023 published by the NBU and the PDMA project, we are able to tell you about the main trends and changes that have taken place in the market.
Therefore, the insurance market of Ukraine continues to actively recover in the first half of 2023. Insurance premiums for risk insurance amounted to UAH 19.1 billion, which is 24.0% more than in the same period of 2022. However, this result is still worse than the first half of the “pre-war” year 2021 by 13.5%.
The following types of insurance have traditionally become the main drivers of the growth of insurance premiums of risk insurers: Motor Casco + UAH 1,442.9 million. (+ 42.6%), OMTPL Domestic + UAH 925.9 million (+ 33%) and Green card + UAH 847.8 million (+ 54%). These types of insurance account for 57% of all collected premiums for the first 6 months of 2023.
The primary cause of the increase in insurance premiums for Motor Casco and OMTPL Domestic is still inflation, which affected the increase in the cost of vehicles, auto parts and repairs in general, which affects the increase in the price of insurance.
However, we can also see an increase in the number of concluded contracts for Motor Casco by 24.3% and OMTPL Domestic by 14.9%. Among the reasons, in particular, the recovery of the new car market can be indicated. Thus, according to the information and analytical group “Auto-consulting”, the market of new cars shows quite good results in the direction of increasing sales volumes.
As for the increase in the amount of insurance premiums for the Green Card, such an increase is due, among other things, to inflationary processes in Ukraine and frequent border crossings by our citizens.
Separately, we note that analyzing the data of the insurance market, a significant increase in premiums and concluded insurance contracts for property types of insurance is noticeable. For example, for property insurance, premiums from individuals increased by UAH 154.8 million. compared to the first half of 2022. The reason for this is most likely the desire of owners of apartments, houses and other real estate to protect themselves from risks, including military risks. This is also facilitated by the offers of insurers for insurance, including war risks of real estate. And this trend has been observed since the fall of 2022.
And one more group of types of insurance that shows one of the biggest increases is cargo insurance (+263.6 million hryvnias), which, in our opinion, may reflect the recovery of business activity of private enterprises, logistics within Ukraine and beyond.
As for NAIU participants, traditionally, our participants recover more actively than other participants in the insurance market. In the first half of 2023, the amount of premiums collected amounted to 13.8 billion hryvnias, which is 27.7% more than in the same period of 2022, and this figure is already more than in the pre-war 6 months of 2021.
In general, the majority of NAIU participating insurers have already surpassed the pre-war indicators of the first half of 2021 and continue to recover steadily and already increase volumes, which is confirmed by the market share of growth drivers, namely motor types of more than 70% and more than 85% for medical insurance.
The drivers of the growth of the NAIU community, as well as the market as a whole, were motor types, which collectively increased by 2.4 billion hryvnias, and medical insurance, which showed growth of 297.9 million hryvnias.
Insurance payouts for risk types of insurance in the first half of 2023 amounted to UAH 7.2 billion, of which UAH 5.5 billion. (or 76.4%) were paid by NAIU participants.
Insurance payments increased by 28.1% compared to the first half of 2022, but the market has not yet reached pre-war levels. The largest share of insurance payments naturally falls to Motor Casco (2.2 billion hryvnias), OMTPL Domestic (1.8 billion hryvnias) and Health insurance (1.4 billion hryvnias).
Separately, we highlight that the Green card shows the largest increase in insurance payments. Thus, payments increased by more than 200%, which is due to the growth of the average payment in connection with the change in the geography of stay of our citizens.
Insurance reserves continue to grow, and as of June 30, 2023, amount to UAH 24.3 billion, which exceeds last year’s figures by almost 14%. The growth of insurance reserves means that in the following periods insurance payments will continue to grow, since insurance reserves reflect the amount of future liabilities of insurers. Currently, payments in the II quarter of 2023 are more than in the I -th.
The life insurance market, unlike risk insurance, is recovering at a slower pace, but we already have a growth trend. Thus, life insurance premiums in the first half of 2023 increased by UAH 2.4 million compared to the same period in 2022.
Insurance payments are growing at a slightly faster rate, and as of the end of the first half of 2023, amounted to UAH 576.2 million. (289.3 million UAH in the II quarter of 2023). This is again the highest rate of quarterly insurance payments in the last more than 2 years, including the pre-war year 2021.
As of June 30, 2023, the insurance reserves of life insurers increased to UAH 18.1 billion, assets to UAH 22.1 billion. The share of NAIU participants in the indicators of the life insurance market by all indicators is more than 97%.
Insurers also paid UAH 855.7 million in income tax to the budget in the first 6 months of 2023.
More detailed information on the indicators of the insurance market in the 6 months of 2023 can be found at the link: Insurance activity indicators.
