OREANDA-NEWS. On 12 March 2008 was announced, that in Credit-Rating`s view, the overall volume of insurance premiums is to grow by a. 30 percent and will not exceed the nominal GDP growth rates. The sector`s development indicators in 2008 will generally correlate with those of 2007. The insurers are expected to collect UAH20-22.5bn with UAH9.5bn in `classical` segment.

As earlier, the insurance market will be greatly dependant upon auto and mortgage lending. Banks will actively bolster sales of the policies, which are connected with lending only. The development of a real bank insurance (i.e. a bank earns not only from insuring of loans), may follow plunge in growth rates of lending and banks` shrunk capacity in getting `quick money`. The today`s terms of lending makes the voluntary insurance be compulsory. The non-spurred voluntary insurance may result in the fact that Ukraine`s insurers will get no more than 15-20 percent of payments of the overall potential volume.

The insurance tariffs are anticipated to further grow in 2008. That especially concerns the motor insurance, which is associated with the expected rise in number of traffic accidents in Ukraine`s auto booming environment and with lack of driving practice of certain driver categories, as well as with banks` increased commissions. The year of 2007 saw a 1.5x rise in voluntary motor insurance, with such a rate being anticipated in the current year too. The increased cost of the banking, and high rates of traffic accidents and crimes will spur insurers to further set extreme limits for repayments of insurance reimbursements (franchise, exclusions), and to charge customers with paid extra-services.

The development of insurance will be constrained by restricted information on insurance market, which is aggravated by absence of transparent legislative initiatives, which will help to solve this problem. According to State Commission for Financial Services, today only a. 15 percent of insurance companies are ready to voluntary publish all articles of their statements, whereas the legislation deprives the regulator of the right to disclose such information on any market player.

We may not that the insurance business is further becomes more structured and concentrated in 2008. Approximately 40 percent of overall volume of payments in the market account for 20 leading insurers, thereat the total number of insurers operating on the market does not exceed 450. Credit-Rating foresees approximately a half of overall volume of payments to account for the top-20 by end-2008. The unrealized potential of the insurance market will further lure overseas investors, yet not as actively as it did in 2007. Foreign insurers will give advantage to retail segment (individuals) for they consider risks in this segment to be more diversified.