Insurers’ OMTPL Premiums Collection Up 79.6% yoy in 2007

According to Interfax, Ukrainian insurance companies increased obligatory motor third-party liability insurance premium collection by 79.6% yoy to USD 157.8 mln in 2007. The amount insurance policies issued rose 72.3% yoy to 4.32 mln. The average cost of an OMTPL policy was USD 36.6 as of January 1, 2008. Alexander Viktorov: We believe the robust growth in 2007 (in 2006 the market grew only 5%) is related to drivers preparing for the enforcement of coverage by the Ukrainian road police, which finally obtained the right to do so as of the January 1, 2008. We expect that strict enforcement will stimulate the market to at least double in 2008 to more than USD 300 mln. Passage of a draft law currently being considered by the Verkhovna Rada that would substantially increase fines (which currently stand at UAH 17) would be an even more powerful driver of growth in the OMTPL market. The upswing in OMTPL coverage is a booster to players focused on automobile insurance, such as Universalna (SKUN: HOLD), which generates about 10-15% of its premiums from OMTPL.