The insurance market ceased to stagnate and is currently demonstrating a positive growth dynamics. Though, due to inflation, the current growth level is insufficient to catch up with the pre-crisis volume of provided services. A market requires an additional push which can be delivered through its cleaning from unreliable players, the reinforced presence of financial regulators as well as a decrease of state interference in certain insurance sectors.

Insurance market produces only 1% of GDP


Insurance contracts

In 2017 the Ukrainian insurance market grew up 30% after a complicated 2014-2016 period. At the same time, the potential for growth still remains high – the insurance sector in Ukraine produces only 1% of GDP, while in other Eastern and Western European countries it’s responsible for 3-4%, and 7% of GDP respectively. This potential can be brought to life thanks to a large population, availability of many industrial and service sectors, export and large retail market. There are niches unpenetrated by insurance companies in each of the aforementioned sectors. For example, we have poorly developed medical and agricultural insurance sectors, as well as insurance of private property and professional responsibility, while the retirement insurance isn’t represented at the market at all.



Number of underwriters


Development requires qualitative changes

The development of new insurance sectors requires the elimination of unreliable market players as it was done in the banking sector and attraction of foreign investors. The implementation of both scenarios depends on whether the government will create favorable legal conditions for the insurance market functioning.

In order to clear the market from fake companies which don’t provide any insurance services the government may use the same approach as in banking sector – set liquidity, financial solvency and minimal capital requirements which will enable companies to carry out their obligations even during crisis time. The key role in this process should be played by the regulator which should monitor the sufficiency of insurance companies’ reserves for coverage of future obligations.

Financial performance


Vehicle insurance sector is the most challenging

In the sphere of compulsory third party car insurance, we should switch to the online certificate of insurance which will be issued automatically together with the number from the central database. It will help to decrease the number of forged certificates and to omit the situation when after closure insurance companies don’t return certificates which later appear on the market. Another problem to be solved in this insurance sector is when customers prefer not companies with proven reputation but with cheap insurance certificates which are quite often issued by aforementioned unreliable players.

Types of insurance


Social functions should become a concern for insurance companies  

The transition of some social functions from the state to insurance companies is another important step. First of all, it concerns medical, retirement, and professional responsibility insurance – when a manager’s mistake under worst scenario leads to his/her dismissal and not to the bankruptcy of the whole company. It will protect the service users from harmful decisions of management as well as will allow to omit numerous inspections by regulatory authorities.  Furthermore, business should be granted a possibility to freely choose a provider of services on insurance form industrial accident and not be obliged to always apply to the state fund.


Insurance benefits

Ukraine has chosen a pro-European path as well as the western model of economic development. In order to increase the intensity of economic growth, the state should transfer some of its functions to private companies and strictly supervise their adherence to the set norms and regulations. At the same time, these norms should ensure transparent and competitive market conditions instead of creating gaps for semi-legal operations.