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Russia’s insurance company cuts operations in Ukraine

March 18, 2014, 16:55 UTC+3 MOSCOW

Ukrainian companies continue making obligatory insurance payments like OMI

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© ITAR-TASS/Stanislav Krasilnikov

MOSCOW, March 18. /ITAR-TASS/. One of the major Russian insurance companies Ingosstrakh has reduced operations of its Ukrainian subsidiary INGO Ukraine amid the political instability in the country, the president of the insurance group Alexander Grigoriev told journalists.

“We have introduced rigid restrictions. The Ukrainian company is no more insuring against risks of riots and terrorism, though we had this practice before,” he said.

Speaking of cooperation with Ukrainian insurance companies, Grigoriev said it was developing normally but added the reinsurance premium had not been paid for the last two months, which “is probably the most obvious sign of the political crisis in Ukraine for insurance businesses”.

Ukrainian companies continue making obligatory insurance payments like OMI, added Grigoriev. All in all, he believes, insurance businesses will feel all political perturbations indirectly and not immediately.

Ingosstrakh has only two dozen comprehensive insurance cases connected with riots in Kiev and is waiting to see what happens next. Speaking of possible influences of EU and US sanctions, Grigoriev said they would not have any considerable effect on insurance business.

“For instance, Ingosstrakh has no state stake in it, and there are no military companies among its customers,” he said.

However, the situation may worsen for reserves placed in banks abroad since they can be frozen.

“Reinsurance is most dangerous when there are losses but reserves are frozen. This can lead to bankruptcy,” believes Grigoriev.

Ingosstrakh is part of the INGO international insurance group operating in the domestic and external markets since 1947 with branches in Azerbaijan, Kazakhstan, India and China. The group ranks second by assets in Russia and leads in optional insurance, special risk insurance, as well as property and liability insurance.

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