Armenia insurance market sees record-breaking net profits - 2.5bln drams - for 2015

ArmInfo. Armenia's insurance market saw a record-breaking net profits for the last five years - 2.5bln drams ($5.2mln) in 2015, with a 71% year-on-year profits.

For the last five years, the market came close to such indicator only in 2011 when the MTPL was introduced in the country and insurance companies received 2.4bln drams profits after suffering losses a year earlier.

Four out of the six insurance companies operating in the insurance market of Armenia saw profits in 2015.  Rosgosstrakh Armenia Insurance Company was the leader with 1.1bln drams profits for 2015 with more than twofold year-on-year growth. Rosgosstrakh Armenia accounted for 45.2% of the total profits of the insurance companies.  Then goes Nairi Insurance with 633.5mln drams and over twofold y-o-y growth.  INGO Armenia is the third with 487.2mln drams net profits and 8.1% y-o-y growth. Armenia Insurance ranks the fourth with 401.6mln drams and 16.2% y-o-y growth. The remaining two companies suffered losses: Sil Insurance - 22 mln drams (versus 247.8mln drams in 2014) and RESO Insurnce - 127.4mln drams (versus 84.1mln drams in 2014).

The insurance market saw such notable growth of profits in 2015, as insurance premiums increased amid dramatic decline of indemnities. In particular, summary insurance premiums increased 4.3% versus 2014 to 31.3bln drams ($64.8mln). Voluntary insurance payments increased most. Health insurance accounted for 16.3% of total insurance premiums with an 18.3% year-on-year growth to 5.1 bln drams.  Insurance against natural calamities and fire accounted for 9.6% of total (a 47.2% y-o-y growth).  Liability insurance accounted for 1.7% of total (up 3.7% to 533.4 mln drams). Meantime, motor insurance premiums - both the voluntary and compulsory ones - fell, though their share in total premiums is the largest.  MTPL premiums account for 56% of total motor insurance premiums (down 1.1% y-o-y to 17.6 bln drams), while CASCO premiums account for 6.9% of total (down 2.2% to 2.1 bln drams).

Meantime, in 2015 insurance indemnities accounted for 43.3% of total premiums versus 73.3% a year before.  Insurance companies paid 13.6 bln drams ($28mln) indemnities in 2015 which is by 38.4% less than in 2014 as MTPL, CASCO and medical insurance indemnities fell. In particular, MTPL indemnities accounted for 63% of total with a 12.7% decline to 13.6bln drams, medical insurance account for 24% of total with a 28.6% decline to 3.2bln drams; CASCO insurance accounted for 7.9% of total with a 18% decline to 1.1bln drams.

The insurance market encompassing 6 companies -  Rosgosstrakh Armenia, INGO Armenia, RESO, Nairi Insurance, Armenia Insurance, and Sil Insurance - provides 17 out of the registered 19 non-life insurance lines, except railway transport insurance and insurance against judicial and extra-judicial expenses.  INGO Armenia provides 16 insurance lines (the only company to insure water transport).  Rosgosstrakh-Armenia provides 15 insurance lines (the only company to insurance against credit risks). The exchange rate for Dec 31 2015 was 483.75AMD/1USD).