The rating agency "Standard-Rating" is added to the register of authorized rating agencies of NSMSC, certificate №8 from 10.04.2012
Ukrainian insurance group Oranta and INGO Ukraine have been recognized the most open insurers of Ukraine
14-09-2011
On September, 12th, 2011 the RA “Standard Rating” published the results of rating of openness in insurance sector in the official edition of State Financial Services “Ukraine Business Revue”. The Agency has estimated level of openness of 56 insurers operating in Ukraine, including of those with participation of foreign capital.
The trends revealed by the Agency within the rating allow drawing the following conclusions:
Agency analytics did not found any really decent annual report in the 56 companies. The rating leader of 2010, the IC “Ukrainian insurance group” and that of 2009, the NJSIC “Oranta” had rather good corporate annual reports; however they also have been far from the western standards and more likely had advertising character, than focused on real state of affairs in the Company. From 56 companies 15 did not consider placing on the corporate web site at least a semblance of an annual report. Probably the management of those companies believes that showing public disrespect to insurers is a standard of Ukrainian market.
Regular information disclosure to SCSSM was the same poor. Only listed companies were interested to disclose information, the rest did it without great enthusiasm and even permitted certain liberties. For example, we could not find any regular reporting of IC “Alpha insurance” and IC “Providna” in the national system of disclosure, and from 56 companies only 6 submitted their 2010 annual report to disclosure system in time. Other participants of the market disregarded disclosure requirements, even despite changes in the legislation and penalties provided. Emitter specific information has been also disclosed poorly, regulatory requirements have been performed formally. For example, supervisory board structure changes were stated by ICs in the form of an informative letter, without specifying, whose interests the manager is representing in the supervisory board of the company.
The insurers also did not care of reliability of the data on the final owner. Only few companies, mainly with absolute participation of foreign capital, not only did inform the market on the structure of owners, but really had the owners whose stability could be assessed by their public reports. Same as before it was possible to find the companies from offshore jurisdictions or from jurisdictions with soft tax climate among the Ukrainian shareholders. Partial or complete non transparence of final owners has been observed in 38 companies from 56. Such situation is illogical, especially regarding the companies which sell policies to the population. Non-disclosure of the final beneficiaries of business in insurance retail is, at the least, a dangerous tendency.
A separate issue worth to note is the problem of completeness of news line of the insurers. From 56 companies 17 had zero information activity in 8 months of 2011. I.e. their corporate sites did not contain any news, which means that their press-services have been paralyzed. For the companies registered as ALC, it meant complete information vacuum. In best case the insurers could take from independent ratings and rankings the information on the state of affairs in such IC. Complete or partial absence of information activity, same as delay of publication of the regular reporting to regulator are the signs proving to bad financial condition.
As a whole, following the results of rating the Agency did not managed to identify an ideal insurer, from information disclosure point of view. The crisis had its effect; even leaders of rating had gaps in information disclosure. For us it is obvious that the level of information disclosure in the insurance market decreased and in 2011, as analysts observed, has reached the last 5 years’ minimum. The system of information disclosure both requires rigid administration by the regulator, and self-organization of the market. The insured should have possibility to implement in practice the right to reception of information on the insurance company which has sold the policy, and the insurers should at last receive good lawful basis for timely analysis of competitors’ activity.
See detailed research of Ukrainian insurers’ degree of openness in the official edition of Statefinservices “Ukraine Business Revue” no. 36 (1105) of September, 12th, 2011, or on the web site of RA “Standard Rating” (Ukraine).
