Insurance is a strategic activity of Ukrainian Financial Group. Within 12 years, UFG invested around US$ 20 million in its insurance business. The priority status of insurance business for UFG is determined by its importance for both development of the Ukrainian market and carrying out investment projects in Ukraine.
Ukrainian Financial Group started its insurance activity on the Ukrainian and international market in 1993, as it acquired a share portfolio in OSTRA-ODESSA insurance company. In 1994 UFG founded OSTRA-KYIV, a private joint stock insurance company. UFG’s total investment in the project was over US$ 1.8 million. Through an aggressive development strategy, OSTRA-KYIV became a known leader on the Ukrainian insurance market. Trough close co-operation with its foreign counterparts, particularly LLOYD’s, as well as the leading insurers and reinsures from Germany and Russia, OSTRA-KYIV provided a wide range of international quality insurance services, including freight, vehicles, construction risks, property, life and health insurance and reinsurance. OSTRA’s regular clients include Black Sea and Azov Sea steamship lines, Ukrainian offices of EBRD, SIEMENS, BASF, PHILIP MORRIS, REEBOK, LEE, MITSUBISHI and many others. In particular, OSTRA was the first Ukrainian company to win a tender for providing insurance services within the first international investment project in Ukraine since independence, the reconstruction of Boryspil International Airport funded by EBRD. By 2000, the total volume of OSTRA’s transactions exceeded US$ 10 million. Ranked among the most profitable insurance companies and the most efficient businesses across industries in Ukraine, OSTRA became a real blue chip for international investors. In 1997 INGOSSTRAKH, Russia’s major insurer, acquired a 20 per cent share in OSTRA, and three years later Ukrainian Financial Group sold its control share in OSTRA to Alpha Bank.
Ukrainian Financial Group continues to actively operate on the insurance market. In 2000 UFG acquired a control share portfolio in Ukrainian Transport Insurance Company (UTICO), investing both money and expertise in UTICO’s modernisation. As a result, within two years UTICO radically improved its performance and became one of Ukraine’s leading insurance companies by a number of key indicators. In particular, the company’s authorized capital increased two times its original size, reaching UAH 20,000,000. In 2002 UTICO’s income was UAH 5,000,000, insurance premiums and insurance claims paid amounted to UAH 26,378,000 and UAH 5,476,000, respectively. This enabled UTICO to draw equity investment from ERGO Versicherungsgruppe AG (ERGO Insurance Group), Germany’s second largest insurance business. At present, a comprehensive expansion programme is underway with UTICO aimed at enhancement of its business potential, improvement of services quality, and identification of new prospective clients and partners in business.