The development of insurance services is a significant vector in the EU-Ukraine integration process. This review is devoted to analyzing where our country stands in terms of key indicators of the insurance market compared to those of the European states. Ukraine, EU 15 and Poland were chosen for this indicators’ dynamics comparison due to the following reasons: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden, and The United Kingdom are the countries representing the most mature markets of EU 15. Ukraine and Poland, on the other hand, are two neighboring markets similar in size, and more importantly, having had almost identical start conditions for economic transformation in the early 90s.
Insurance penetration, density and loss ratio are common parameters indicating the market maturity level. Density is measured in currency units and is calculated as a relation of total insurance premiums to the country’s population. It basically equals insurance expenses per capita. Penetration, on the other hand, is represented by the ratio of total insurance premiums to the gross domestic product of a country. It is normally given in %. Loss ratio is also a relative indicator measured in % and calculated as the relation of total claims paid to total insurance premiums.
Data dynamics for EU 15, Ukraine and Poland are provided in charts and tables below:
Figure 1. Insurance market penetration, %
|
2010 |
2011 |
2012 |
2013 |
2014 |
EU 15 |
82.34 |
89.31 |
87.84 |
83.29 |
80.30 |
Poland |
68.08 |
69.83 |
64.02 |
63.82 |
62.39 |
Ukraine |
26.45 |
21.43 |
23.95 |
16.23 |
18.90 |
Table 1. Loss ratio, %
Figure 2. Insurance market density, €
|
2010 |
2011 |
2012 |
2013 |
2014 |
Ukraine |
456 |
442 |
414 |
407 |
382 |
Poland |
63 |
61 |
59 |
58 |
80 |
Table 2. Number of insurance companies’ dynamics
Ukraine |
Q1-3 2015 |
Density, € |
21.14 |
Penetration, % |
1.58 |
Claims payment ratio, % |
21.5 |
Number of insurance companies |
368 |
Table 3. Current key insurance market indicators of Ukraine
Comparing market indicators of Ukraine to European Union 15 and Poland allows the conclusion that our country, unfortunately, is still far behind mature European markets as well as Poland’s emerging one.
The following factors impede the development of the national insurance services segment: