Ukrainian travel insurance sector to show record growth rates
The Ukrainian travel insurance market will grow by 50 per cent this year, reaching UAH1 billion (€37 million) in value terms, writes Eugene Gerden
This will make it the fastest-growing segment of the entire insurance market in Ukraine, according to recent predictions made by representatives of some leading Ukrainian insurance companies and local analysts.
According to Andrei Sparish, Deputy Director of the Ukrainian insurer EKTA, it will be the highest growth rate in the market for 10 years and could maintain in years to come. This growth, however, has led to a rise in the cost of travel insurance policies in Ukraine. This is mainly due to the expansion of the basic list of services and the inclusion of additional options for travel insurance sold in Ukraine.
In the meantime, local sales structure is also changing, primarily in favor of the online segment, where sales of travel insurance this year grew by more than 30 per cent, compared to the first 10 months of 2018.
According to Elena Ivanova, Director of the Department of Personal Insurance and Insurance Products Management of PZU Ukraine, the Ukrainian subsidiary of the Polish PZU, the online sector is not the only sales channel showing stable growth rates; good dynamics are also currently observed in traditional sale channels, including offices and banks.
Among the major reasons for such growth, according to analysts, are the ever growing number of Ukrainians officially employed abroad (which requires compulsory insurance coverage), the lifting of entry barriers with the European Union, and more active use of cheap transport methods such as low-cost airlines and buses by local citizens. Andrei Peretyazhko, President of the Ukrainian Insurance Federation, also pointed out that growth in the market has also been driven by improvements in the Ukrainian national economy, the reduction of inflation rates and stabilisation of the exchange rate of the local currency, hryvnia.
According to local analysts, weakening of the US dollar (in regard to hryvnia), which has primarily been observed in the second half of this year, had a positive impact on the overall volume of sales of travel packages and insurance in Ukraine.
Experts also said that, at present, the Ukrainian travel insurance market is highly fragmented, as in recent years the number of companies specialising in the provision of services in the field of travel insurance has significantly increased and continues to grow.
“There are currently lots of companies on the market that offer policies with reduced programmes and with small medical treatment limits,” said Elena Ivanova. “For example, with a total insurance amount of €30,000, the limit for inpatient care is only €2,000 or €3,000, and sometimes no more than €500s. Obviously, such amounts are not enough to cover most cases of treatment during hospitaliSation. Some companies even sell so-called ‘visa application’ policies, which are very cheap, but do not cover anything.”