Only 20% of insurance companies funds are liquid

“Capitalization of the insurance market of Ukraine currently amounts to around UAH 65 bn. However, half of these funds exist only in the form of promissory notes, shares and only 20% are liquid funds that the insurers can actually use,” Acting Head of the National Commission for Regulation of Financial Services Maksym Polyakov said at a press conference.

Polyakov pointed that the insurers experience problem with using the reserves, located at the problem banks. “Part of these funds is currently at the banks that have gone bankrupt and the insurers cannot obtain them and use in their reserves. Not every insurance company had the right approach and could forecast what is happening; the companies did not economize, were dumping prices and now they have big problems,” specified the head of the commission.

The commission divided insurance companies into three risk groups. The first group are high risk insurers. It includes 17 companies experiencing systemic problems in operation, shortage of liquid funds for ensuring current insurance obligations and against whom consumers of financial services complain most.

The second group includes medium-risk companies. It consists of 16 insurers. These companies do not experience shortage of liquid funds, but consumers of financial services regularly file complaints about them. The third group is low risk companies. It includes 50 insurers. The companies experience no shortage of liquid funds for ensuring current insurance obligations.