Friday, October 14 2011 18:27
MTPL loss ratio will become critical till late 2011: Head of INGO Armenia Insurance Company
ArmInfo. The loss ratio of the Motor Third-Party Liability Insurance (OSAGO) will become critical till late 2011 reaching 70%, Levon Altunyan, INGO Armenia Insurance Company Executive Director, told media, Friday, when commenting on the growth of insurance premiums for the last 2-3 months. He said that as of late Sept 2011 indemnities reached 60%-62% of total premiums collected since the beginning of the year.
International practice shows, he said, that insurance companies gain extra-profits in the first year of introduction of the motor liability insurance, which allows them to "store enough fat" for the third and even the fourth years after introduction of MTPL. Altunyan said that the number of road accidents is growing alongside with the cost of event management amid not changing premiums.
In Armenia, he said, no extra-profits are observed. The profits reach 10% or 11%, at best, for the year, which is too little to feel confidence in future years, he said. Altunyan predicted less profitable year for the insurance society of Armenia in 2012.
He said that the 55% of the company's portfolio are compulsory insurance policies, and the remaining is voluntary insurance lines, particularly medical insurance, CASCO and property insurance. Altunyan said that company will work to reduce the share of MTPL in total to 50% till the end of the year due to the growth of voluntary insurance. In future, the company is going to reduce the given figure to 30%. Ranking of the Armenian Insurance Companies prepared by the Agency of Rating Marketing Information (ArmInfo) says INGO Armenia is the leader in terms of insurance premiums for Q2 2011 - 958.2 mln drams.
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