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05.02.2016
1876
Forbes presents its annual insurance company reliability rating. In compiling this rating, we aimed to help clients and partners of insurers evaluate the condition of retail insurers before deciding whether to partner with a particular company. As in the previous year, the top spots in the rating were occupied by subsidiaries of international financial groups. However, whereas in 2014, the rating concerned subsidiaries of Austrian, French, and German companies, in 2015, all top spots were occupied by companies with Austrian and Dutch capital.
As in the previous year, the first criterion for inclusion in the Forbes rating was premiums collected. We based our calculations on the 2014 Insurance Top ranking for companies with gross insurance premiums exceeding UAH 100 million.
The calculation also took into account equity, payout levels, and reinsurance levels.
As in 2014, the 2015 insurance company ranking included 29 of the largest insurers. While, according to the National Commission for Financial Services, the risk segment of the insurance market in 2014 consisted of 325 insurance companies versus 345 risk companies – at the beginning of 2013.
Compared to 2013, the volume of gross insurance premiums in 2014 decreased by UAH 1.89 billion, or 6.6%. This figure amounted to just over UAH 26.7 billion. "In 2014-2015, the deterioration of the economic and political situation in the country undoubtedly had a negative impact on the state of the insurance market. Purchasing power is declining among both retail and corporate clients, which leads to a reduction in the volume of the insurance market and the number of contracts concluded," Igor Gordienko, Chairman of the Board of Ingo-Ukraine Insurance Company, explains.
According to him, the devaluation of the national currency, processes in the banking sector, reported losses in the ATO zone, and a number of other factors are negatively impacting the margins of insurance operations. "A number of key market players have seen increased payout volumes, which is stimulating a more conservative pricing policy and cost reduction. The main task for all insurance companies, including ours, is to maintain liquidity," Gordienko states.
Alexander Nakonechny, Chairman of the Board of Kraina Insurance Company, recalls that in 2014, insurers were forced to seek a way out of unfavorable circumstances. "Some closed regional offices, hoping to retain their core staff at the central office, others cut payroll, and some companies were forced to cut staff by a third, or even by half," Nakonechny emphasizes. Exchange rate fluctuations in the national currency, followed by rising prices, forced Ukrainians to cut their expenses and redirect spending toward essential products and services. Unfortunately, insurance is not yet considered one of these."
Gross insurance payments increased by UAH 413.6 million, to UAH 5 billion. The net insurance payout rate reached 26.3%, up from 21.2% in 2013 and 24.5% in 2012.
According to the National Financial Services Commission, the increase in gross payouts is due to a decrease in insurance premium revenues, while payouts themselves increased by 8.9%. Moreover, the highest level of payments is observed in health insurance, voluntary personal insurance, and compulsory civil liability insurance of vehicle owners to third parties.
Oleksiy Muzychko, Chairman of the Board of PJSC IC Universalnaya, notes that in 2014, the market was affected by "its active redistribution in favor of companies that, during the crisis, have a stable financial position, sufficient liquidity, and are capable of efficiently settling insurance claims and paying out, as well as the actual bankruptcy and exit of many major players in auto insurance."
Igor Gordienko adds that a significant test for the market in 2014 was "the growth of unprofitability associated with the more than twofold devaluation of the hryvnia against "The dollar has changed, which has necessitated a revision of some insurance terms and more conservative risk assessments."
According to Gordienko, these changes primarily affected CASCO insurance, medical expenses, and some other types where currency fluctuations influence the amount of loss. "For example, our company paid a number of large losses related to the ATO zone," says the insurer.
As Forbes predicted a year ago, in 2014, insurers faced unprecedented conditions – from revolution and war, which were expected to spur demand for a number of insurance products from the corporate segment, to a decline in consumer activity due to the negative economic situation. The market was also influenced by the expected reassignment of the segment from the regulator, the National Commission for Financial Services, in the near future – The National Bank of Ukraine, where the relevant department is already being prepared. So what came of it?
In first place in the Forbes rating is the insurance company "Princely Vienna Insurance Group". According to the Agency for the Development of the Stock Market Infrastructure of Ukraine, 89.9% of the insurer's shares are owned by Vienna Insurance Group AG Wiener Versicherung Gruppe.In second place Uniqa, a 92.2% stake in which is controlled by UNIQA internationale Beteiligungs-Verwaltungs GmbH (Vienna). Third place went to Ukrainian Insurance Group, currently 92% owned by TBIH Financial Services Group N.V. of the Netherlands, whose ultimate beneficiary is also Vienna Insurance Group. Four insurance companies were not included in the rating due to high levels of reinsurance, which may indicate either the company's participation in schemes or its work with large risks, which is typical for the corporate segment, but not for retail. The following companies were not included in the rating: HDI Insurance, which reinsured 74.85%; Dnipromed, which reinsured 100.42% of its premiums; Busin, which handles large risks, including aviation (reinsurance level - 88%); and Nadezhnaya, which has a reinsurance rate of over 91.89%.
Also not included in the rating was Lemma Insurance Company, which was previously one of the most prominent participants in the financial sector. The company's founder and shareholder, Sergey Chernyshov, died tragically in the winter of 2015.
Last year's top-three insurers in the Forbes ratings – AXA Insurance and Allianz Ukraine – ranked 8th and 14th, respectively, in 2014. Ilyichevskoye, a company part of SCM, rose from 24th to 12th place.
As in the previous year, the last two places in the ranking were shared by one of the country's oldest insurance companies, ASKA, and Alliance.
Company
| Debt load | Liquidity | Payout level | Increase in premiums | Capital gains | Entering the IFG | Level reinsurance | Coefficient. financial strength | Final score | Rating |
|---|---|---|---|---|---|---|---|---|---|---|
| «Prince» | 2 | 2 | 3 | 4 | 4 | 4 | 3 | 2 | 3.10 | B |
| «Unika» | 1 | 1 | 4 | 4 | 3 | 4 | 3 | 2 | 3.00 | B |
| Ukrainian Insurance Group | 1 | 3 | 4 | 3 | 1 | 4 | 2 | 2 | 2.95 | B |
| «Universal» | 2 | 1 | 3 | 4 | 3 | 3 | 4 | 3 | 2.85 | B |
| «PZU Ukraine» | 1 | 1 | 3 | 4 | 3 | 4 | 4 | 1 | 2.85 | B |
| «Simple insurance» | 3 | 4 | 4 | 2 | 4 | 2 | 1 | 3 | 2.85 | B |
| «Ingosstrakh» | 4 | 4 | 3 | 2 | 4 | 1 | 3 | 4 | 2.80 | B |
| «AHA Insurance» | 2 | 2 | 4 | 2 | 3 | 4 | 1 | 3 | 2.80 | B |
| «Providna» | 3 | 3 | 4 | 2 | 4 | 2 | 1 | 3 | 2.70 | B |
| Utico | 4 | 4 | 2 | 3 | 3 | 1 | 3 | 4 | 2.70 | B |
| «Ingo Ukraine» | 2 | 2 | 4 | 2 | 3 | 2 | 4 | 2 | 2.65 | B |
| «Ilyichevskoe» | 2 | 2 | 3 | 4 | 4 | 1 | 4 | 2 | 2.60 | B |
| European Insurance Alliance | 3 | 2 | 3 | 3 | 3 | 1 | 4 | 3 | 2.55 | C |
| «Allianz Ukraine» | 1 | 1 | 3 | 3 | 1 | 4 | 3 | 1 | 2.50 | C |
| «Skyd» | 4 | 3 | 1 | 3 | 3 | 1 | 4 | 4 | 2.45 | C |
| SG TAS | 3 | 2 | 3 | 3 | 3 | 1 | 2 | 3 | 2.35 | C |
| «Persha» | 1 | 2 | 2 | 4 | 3 | 1 | 4 | 2 | 2.25 | C |
| «Alfa Insurance» | 3 | 4 | 1 | 2 | 4 | 2 | 1 | 3 | 2.25 | C |
| «Oil&Gazstrakh» | 4 | 2 | 1 | 4 | 2 | 1 | 1 | 4 | 2.10 | C |
| «Dominant» | 4 | 3 | 1 | 1 | 4 | 1 | 3 | 4 | 2.10 | C |
| UPSK | 3 | 4 | 1 | 2 | 3 | 1 | 1 | 4 | 2.05 | C |
| USK | 2 | 2 | 2 | 2 | 3 | 1 | 4 | 2 | 2.05 | C |
| «Brokbusiness» | 3 | 3 | 1 | 1 | 4 | 1 | 2 | 4 | 1.90 | C |
| «Arsenal Insurance» | 2 | 2 | 2 | 2 | 4 | 1 | 1 | 2 | 1.80 | D |
| VUSO | 4 | 2 | 1 | 2 | 2 | 1 | 1 | 4 | 1.80 | D |
| «Oranta» | 3 | 1 | 2 | 2 | 3 | 1 | 1 | 3 | 1.75 | D |
| «Krayina» | 3 | 2 | 2 | 1 | 3 | 1 | 1 | 3 | 1.75 | D |
| «Alliance» | 4 | 1 | 1 | 1 | 4 | 1 | 1 | 4 | 1.60 | D |
| «Asuka» | 1 | 1 | 2 | 2 | 2 | 1 | 1 | 2 | 1.45 | D |
Level A – "reliable"; B – "stable"; C – "satisfactory"; D – "bad".
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