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02.03.2010
Credit-Rating estimates actual decline in premiums of classic insurance at 30%
Credit-Rating has today published report titled ‘Insurance Market: Will a General Cleaning Spur Rise in Confidence’, which evaluates market trends in classic (not scheme) insurance. The agency estimates decline in volume of premiums in classic insurance sector at not less than 30% in 2009, considering total inflation rate. The past year has shown simultaneous decrease in the volumes of both the raised insurance payments and the reimbursed compensations. The nominal drop of 18% in the entire market is explained with retained demand for so-called scheme insurance.
A negative trend of 2008 was represented by gradual growth in gap between the amounts claimed for reimbursement and the amounts paid by insurance companies. The amount of claimed and unpaid damages increased by almost UAH0.5bn over January-September 2009 alone, and exceeded UAH1.5bn in 2009 (to compare – all reimbursements paid in the year exceeded UAH6bn).
Credit-Rating notes that further shrinking volumes of insurance will not result in decrease in the number of players. New companies are often established by owners of existing insurers, which experience troubles in the business having debts towards customers and lenders. Under such circumstances the problems associated with supervision over insurers become especially acute, specifically in terms of regular reports that are submitted to the Commission on the quarterly basis (25 days after end of reporting period). By the time the regulator investigates into the actual state of the company, the company’s liquid assets may be transferred to from the old companies to newly established companies, with the former to face license withdrawal and liquidation. The absence of stringent requirements with regard to information disclosure by the insurers does not allow to fully protect the customers, who more and more often face insurers’ insolvency. Alexey Kapustinskyi, a Credit-Rating’s leading analyst thinks that ‘today the only way to obtain actual information about the insurer’s financial state remain credit ratings issued by independent credit rating agencies’.
Review: Insurance Market: Will a General Cleaning Spur Rise in Confidence? (rus)
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Iformation and analytic
department
Sergey Rozumyak +38044490 25 50
SRozumyak@credit-rating.com.ua
Denis
Rudenko
DRudenko@credit-rating.ua
