Friday, December 28 2012 15:53
By its insurance market size Armenia outstrips Central Asian countries and lags behind its neighbors
ArmInfo. By its insurance market size, Armenia outstrips the countries of Central Asia and at the same time lags behind its neighbors. According to the insurance report of Media XPRIMM (Romania), which refers to ArmInfo, against the background of its post-Soviet neighbors, particularly, Georgia and Azerbaijan, Armenia's insurance market seems modest enough.
In particular, the Azerbaijani insurance market is almost 4 times as large as the Armenian one, and the Georgian insurance market is 2.5 times as large as the Armenian one. At the same time, it should be noted that both neighbors outstrip Armenia by the number of their population. To note, Azerbaijan has several compulsory types of insurance (including motor third-party liability insurance), while Armenia has only two such insurance types. Unlike its neighbors, Georgia has no compulsory insurance, though the Georgian insurance community made unsuccessful attempts in this direction several years ago. Instead, due to the radical insurance reforms launched in 2006, today Georgia has dynamically developing health insurance, which secured 65% of the total insurance premiums in the first half of 2012. As a result of the reforms, the standard health insurance policy has become more affordable in price. In addition, the average insurance package includes treatment of oncological diseases and does not rule out treatment of the diseases revealed.
Drawing parallels between the insurance markets of Armenia and other countries of the post-Soviet space, it is necessary to point out that in Armenia the compulsory types of insurance have a prevailing position in the insurers' portfolios (85%), which is quite the opposite picture of all the other post-Soviet countries practicing compulsory types alongside with the voluntary types of insurance. According to Media XPRIMM, in both Georgia and Azerbaijan, as well as in a number of Central Asian countries, insurance companies also practice life insurance, which is missing in Armenia.
Just to compare, in Jan-June 2012 the capacity of Armenia's insurance market made up 45mln EUR, against 30mln EUR in Turkmenistan and Moldova, 9.5mln EUR in Tajikistan and just 1.54mln EUR in Kyrgyzstan.
In the "second rate" post-Soviet republics the numbers of insurance companies are much different: in Turkmenistan there is just one company, in Tajikistan 14 (with two domineering companies), in Moldova as many as 24.
In Central Asia only Uzbekistan's insurance market is bigger than Armenia's. In Jan-June 2012 its capacity made up 57.8mln EUR. In that country, just like in all of Central Asia, voluntary insurance is prevalent, with compulsory insurance making up just 1/3 of the local insurers' premiums.
Media XPRIMM is ArmInfo's partner in insurance analysis. For 10 years already it has provided professional financial analysis and reviews of markets in Central and Eastern Europe, Russia and the CIS.
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