Ukraine's life market was ranked 97th globally in 2017 and could be considered a small to medium-sized emerging market. As in some other post-Soviet economies, the insurance culture and product penetration remain quite low, but the market size has now reached the milestone of gross written premiums of USD 100mn.

Despite a challenging political and economic climate, the full-year results for 2017 were modestly satisfactory with gross written premiums amounting to UAH 2.91bn (USD 109.55mn), a modest growth of 5.72% over the prior year in local currency. It should be noted, however, that all the market leaders had strong double-digit growth; the issues of negative growth in other companies and market exits impacted the market overall. Signs of strong growth were more evident, however, after the first nine months of 2018 with premiums amounting to UAH 2.74bn (USD 101.36mn), representing growth of 35.58% driven by credit life sold via the bancassurance channel. Market sources were projecting growth rates of about 25% for 2019 and 2020.

The change of President in April 2019 was expected to bring continued political and economic uncertainty in the short-medium term. The slow pace of progress in recent years has caused several foreign companies (both life and non-life) to reconsider and exit the Ukrainian insurance market, Aegon, Renaissance (Russia) and AXA being the most significant of the life companies.

Several major projects remain pending, including the transformation of the health service and implementation of Pillar II pensions which could have a positive impact for life companies depending on how the legislation develops. Meanwhile, the Commission continues its work to gradually clean the market of insolvent and unprofessional insurers and support operational improvements and transparency. Some modernisation steps are being taken as the first business processed online (compulsory motor third party liability) commenced in 2018 and consumer protection measures relating to surrender values were adopted. In February 2019 life insurers were granted the right to obtain a licence from the National Bank in order to conduct business in foreign currencies and some insurers were planning to apply for this.

For more information about Axco's Insurance Market Report for Ukraine, please contact axco@axcoinfo.com.