To insure or not to insure, that's the question ... How to reduce costs from unforeseen catastrophes and Cho is happening in the Ukrainian insurance market.
What is now the property insurance market and whether this kind of protection against financial losses is used by Ukrainians.
Classic Insurance
Three recent and serious explosions in apartment buildings in Kiev for a month, three dead, irreparable destruction. At least 77 people in need of new housing.
All costs, as usual, will be borne by the state. Although theoretically, the situation could be less urgent and costly for the budget - enough that the apartments destroyed in the accident were simply insured.
The average cost of a one-room apartment in Kiev is approaching $ 1,000 per sq. M. m. In the ruined house in Goloseevsky district, there were 17 apartments. None of the tenants of the three-story house was insured.
What is now the property insurance market and whether this kind of protection against financial losses is used by Ukrainians.
Classic Insurance
Three recent and serious explosions in apartment buildings in Kiev for a month, three dead, irreparable destruction. At least 77 people in need of new housing.
All costs, as usual, will be borne by the state. Although theoretically, the situation could be less urgent and costly for the budget - enough that the apartments destroyed in the accident were simply insured.
The average cost of a one-room apartment in Kiev is approaching $ 1,000 per sq. M. m. In the ruined house in Goloseevsky district, there were 17 apartments. None of the tenants of the three-story house was insured.
When a gas explosion, as a rule, there is total damage - this is the standard insurance case. This risk is included in the basic coverage for property insurance, which includes insurance against fire, explosion, lightning, falling aircraft. If the apartment in which such an event occurred was insured, then the owner can expect to receive insurance compensation. The insured amount is set by the contract, but it can not exceed the market value of the apartment, "- says underwriter SK UNIQA Alexandra Lyakhovskaya.
According to the National Financial Service in the I quarter of this year, the growth of insurance premiums (that is, premiums of insurance companies' customers) in the "fire risk and natural disaster insurance" segment amounted to 112%. Plus 722.8 million USD quarter to quarter. However, it is difficult to name these figures. Insurers emphasize: physical persons insure their property, including fire threats, very rarely. In fact, the whole market is solely formed by corporate insurers.
This figure is the volume of the entire insurance market against fire risks. They are more than 90% provided by the corporate segment - that is, property insurance of enterprises, not citizens. For the full year of 2016, the volume of retail insurance payments (pertaining only to natural persons - ed., Ed.) From fire risks amounted to about 260 million UAH, together with other property insurance risks, the retail segment is less than 1 billion UAH, "the company said.
Natalya Lutsenko, deputy head of the retail sales department of ASK "INGO Ukraine", the legal entity that generates most of the insurance premiums, is often a large merchant who insures not only warehouses, offices, etc., but also goods as in a warehouse, and in the turnover. The second point - real estate, which acts as a pledge for a loan - by law, such objects must be insured without fail.
Options and prices
Individuals' insurance in Ukraine is, in fact, only a tenth of the market. Gross insurance premiums (including intermediary reinsurers) for all types of insurance in the first quarter amounted to 10.896 billion UAH. As noted in the company ASKA, if we talk about real estate insurance, most often Ukrainians do not buy full-fledged housing insurance programs, but express protection in addition to other financial products - for example, banking or CASCO insurance.
If documents confirming the fact of a fire (explosion) exist, the event will be recognized as an insurance event and the client will receive a payment. However, now more often customers express a desire to insure property (apartments) for express insurance, where the insurance amount is not established based on the market or the actual value of the apartment. In this regard, the payment is carried out in the limit of the sum insured and does not cover the real losses incurred by the client, "- say in the SC" Providna. "
According to the National Financial Service in the I quarter of this year, the growth of insurance premiums (that is, premiums of insurance companies' customers) in the "fire risk and natural disaster insurance" segment amounted to 112%. Plus 722.8 million USD quarter to quarter. However, it is difficult to name these figures. Insurers emphasize: physical persons insure their property, including fire threats, very rarely. In fact, the whole market is solely formed by corporate insurers.
This figure is the volume of the entire insurance market against fire risks. They are more than 90% provided by the corporate segment - that is, property insurance of enterprises, not citizens. For the full year of 2016, the volume of retail insurance payments (pertaining only to natural persons - ed., Ed.) From fire risks amounted to about 260 million UAH, together with other property insurance risks, the retail segment is less than 1 billion UAH, "the company said.
Natalya Lutsenko, deputy head of the retail sales department of ASK "INGO Ukraine", the legal entity that generates most of the insurance premiums, is often a large merchant who insures not only warehouses, offices, etc., but also goods as in a warehouse, and in the turnover. The second point - real estate, which acts as a pledge for a loan - by law, such objects must be insured without fail.
Options and prices
Individuals' insurance in Ukraine is, in fact, only a tenth of the market. Gross insurance premiums (including intermediary reinsurers) for all types of insurance in the first quarter amounted to 10.896 billion UAH. As noted in the company ASKA, if we talk about real estate insurance, most often Ukrainians do not buy full-fledged housing insurance programs, but express protection in addition to other financial products - for example, banking or CASCO insurance.
If documents confirming the fact of a fire (explosion) exist, the event will be recognized as an insurance event and the client will receive a payment. However, now more often customers express a desire to insure property (apartments) for express insurance, where the insurance amount is not established based on the market or the actual value of the apartment. In this regard, the payment is carried out in the limit of the sum insured and does not cover the real losses incurred by the client, "- say in the SC" Providna. "
With the express format of insurance, a client is usually given a choice of several fiscated amounts or calculates them depending on the size of the apartment and the quality of the repair in it. In classical insurance payments directly depend on the market value of the apartment at the time of the occurrence of the insured event. Before entering into the contract, the managers of the insurance company inspect the apartment and register the property of the insured.
Express insurance will cost the client much cheaper than a full-fledged insurance. In general, the minimum insurance express payments with a calculation for a one-month policy make up 50-70 UAH in this model. But depending on the option of insurance, annual costs can be smaller.
The cost of the policy depends on the amount of the insured amount, the level of the franchise, the place of insurance, the terms of payment of insurance compensation and other parameters. On average, complex apartment insurance in the economy class will be UAH 2,500 a year. For products of express insurance for fixed insignificant insurance amounts, the payment will be approximately 250-500 UAH / year, "they say in the UNIQA UK.
Express insurance will cost the client much cheaper than a full-fledged insurance. In general, the minimum insurance express payments with a calculation for a one-month policy make up 50-70 UAH in this model. But depending on the option of insurance, annual costs can be smaller.
The cost of the policy depends on the amount of the insured amount, the level of the franchise, the place of insurance, the terms of payment of insurance compensation and other parameters. On average, complex apartment insurance in the economy class will be UAH 2,500 a year. For products of express insurance for fixed insignificant insurance amounts, the payment will be approximately 250-500 UAH / year, "they say in the UNIQA UK.
Unnecessary insurance
According to Alexander Melnichuk from PZU Ukraine, in conditions when the annual insurance of a three-room apartment can cost 500-800 UAH, the price is clearly not the main reason for the low demand for home insurance in Ukraine. The problem is in the low culture of insurance among Ukrainians and the low level of the popularization of such services, both by insurers and the state.
"Daily in Ukraine there are more than 250 events that cause damage to housing, including catastrophic ones.The responsibility for the well-being of the victims is borne by the state, which partly or completely compensates for losses from special funds." Motivating in terms of property insurance does not form this, "- says Alexander Melnichuk.
On the one hand, citizens understand: no matter what happens, they will always receive state revenue, on the other - they do not trust insurance companies that do not particularly explain to the general public the principle of property insurance, from the cost of the policy to the order of insurance payments.
"The client sometimes does not even know what can be insured and what risks: how much it costs and how the amount of insurance compensation is calculated.The second point: imposed insurance products from a company with a bad reputation in the market.Third: the insurance conditions are prescribed in such a way that the client is unlikely Of course, because of this negative experience, no one believes in insurance, "says Alexandra Lyakhovskaya from UNIQA UK.
Insurance companies themselves are not particularly interested in popularizing housing insurance services. It is more profitable for them to work with demanded auto insurance programs for CASCO and OSAGO, instead of investing in the serious promotion of other services. As the iMark insurance marketing agency says, over the past 10 years, Ukraine has not had any truly large-scale advertising campaign in this sector. The situation has become more complicated in the last 2 years, together with economic problems in the country. Now to promote this service is even more difficult.
Our citizens have a stereotype that apartment insurance is very expensive. People draw parallels with auto insurance for CASCO and think that housing protection will cost even more - the apartment costs more than a car. The fact that the tariffs for housing insurance are an order of magnitude lower than in the case of cars, the population does not know. In addition, studies show that many Ukrainians perceive home insurance as another mandatory payment is akin to paying for utilities, "the agency explained.
According to Alexander Melnichuk from PZU Ukraine, in conditions when the annual insurance of a three-room apartment can cost 500-800 UAH, the price is clearly not the main reason for the low demand for home insurance in Ukraine. The problem is in the low culture of insurance among Ukrainians and the low level of the popularization of such services, both by insurers and the state.
"Daily in Ukraine there are more than 250 events that cause damage to housing, including catastrophic ones.The responsibility for the well-being of the victims is borne by the state, which partly or completely compensates for losses from special funds." Motivating in terms of property insurance does not form this, "- says Alexander Melnichuk.
On the one hand, citizens understand: no matter what happens, they will always receive state revenue, on the other - they do not trust insurance companies that do not particularly explain to the general public the principle of property insurance, from the cost of the policy to the order of insurance payments.
"The client sometimes does not even know what can be insured and what risks: how much it costs and how the amount of insurance compensation is calculated.The second point: imposed insurance products from a company with a bad reputation in the market.Third: the insurance conditions are prescribed in such a way that the client is unlikely Of course, because of this negative experience, no one believes in insurance, "says Alexandra Lyakhovskaya from UNIQA UK.
Insurance companies themselves are not particularly interested in popularizing housing insurance services. It is more profitable for them to work with demanded auto insurance programs for CASCO and OSAGO, instead of investing in the serious promotion of other services. As the iMark insurance marketing agency says, over the past 10 years, Ukraine has not had any truly large-scale advertising campaign in this sector. The situation has become more complicated in the last 2 years, together with economic problems in the country. Now to promote this service is even more difficult.
Our citizens have a stereotype that apartment insurance is very expensive. People draw parallels with auto insurance for CASCO and think that housing protection will cost even more - the apartment costs more than a car. The fact that the tariffs for housing insurance are an order of magnitude lower than in the case of cars, the population does not know. In addition, studies show that many Ukrainians perceive home insurance as another mandatory payment is akin to paying for utilities, "the agency explained.
Ukraine is outside the world traditions
The Ukrainian experience in terms of housing insurance is very different from the world practice. According to Alexander Melnichuk from the company PZU, for example, in Lithuania, real estate insurance is one of the most sought-after services on the market. As specified by Alexandra Lyakhovskaya from UNIQA, in some countries, home insurance is a legal norm established by the state.
"In France, property insurance against fire and natural disaster is a compulsory type of insurance, Romania, as a result of constant floods, has also switched to mandatory housing insurance against natural disasters." In Ukraine, this is a voluntary type of insurance. "We do not have special social insurance programs, for example, property in rural areas or in areas with frequent natural disasters.The damage resulting from natural disasters is being reimbursed at the expense of state or local budgets, "Lyakhovskaya said.
In the agency, iMark give an example of Germany, where the insurance of residential property is governed by the "Law on joint households." According to the law, the "declaration on the division of property" contains a description of the necessary types of insurance for the building as a whole and the land plot under it. In addition, it is indicated which tenants (owners or tenants) must conclude insurance contracts and monitor their relevance. Responsible for all this elected by the tenant's chairman of the council of joint homeownership by analogy with our OSBB.
Ukraine is not yet particularly eager to adopt foreign experience. Citizens are not very much encouraged by the catastrophes of their compatriots, realizing that the state still remains, in fact, a free insurance agent for its citizens. Although the opportunity to reduce the cost of government costs associated with this, shifting them to the private sector, the state still has it.
Author: Sergey Shevchuk
Based on materials: "DELO"