Monday, February 7 2011 11:27
CASCO sector will become really active in some six months
ArmInfo. Interview with Hayk Baghramyan, Executive Director of Sil Insurance Company
Mr. Baghramyan, all our insurers explain growth of CASCO contracts with introduction of compulsory insurance in the country. Your company forecasted 30%-40% growth of CASCO premiums. Did your expectations come true? What do you expect in the segment in a year or two?
Many drivers who have already bought motor third party liability insurance policies are showing interest in CASCO as well. But only few of them have bought the latter. We are not surprised. This sector will start growing only when drivers see that insurance in Armenia is effective and that they will get their compensation in time. The CASCO sector will become really active in some six months, I think.
Insurers keep actively fighting for every customer. Is there unfair competition in the given sector?
With introduction of compulsory insurance institute in the country all the insurance companies began developing their own agent networks and we did the same. Unfortunately, some agents resort to incorrect tricks to attract a customer, and even make unfair deals etc. All this impedes our work, of course. Nevertheless, the most efficient sales channel are agents networks.
Mr. Baghramyan, almost all insurers spend rather serious funds on advertising. Is it justified?
When calculating insurance tariffs the companies had no real statistics on road accidents and had to apply to experts. However, data the tariffs are based on are still inaccurate. In conditions of such uncertainty, it is wrong spending much on advertising and management, I think.
Compulsory insurance will exceed 70% of the portfolio of insurance companies in a certain period of time. It is a serious problem for the market, isn’t it?
Such ratio is normal for the first years. Another matter that it continues longer. Motor insurance often becomes loss making if it brings profits for the first 2-3 years. Nevertheless, introduction of compulsory insurance institute settles a serious social task i.e. increases the insurance culture and helps insurers develop also other insurance lines.
Do the economic situation and solvency of the citizens allow introduction of MTL? Don’t you think that compulsory insurance is untimely from this point of view?
Quite on the contrary, it is belated to some extent. Citizens would perceive such innovation as an additional tax at any stage. The task of insurers is to carefully organize the system of insurance, create effective infrastructure and change the public opinion by positive examples.
With introduction of MTL public organizations began receiving more complaints about activity of the Road Police officers...
I think it is connected with staff shortage at the Road Police. I hope the problems will be settled shortly. In addition, such phenomena are predictable for our country.
How many MTL contracts have you made? Have you paid any big indemnities?
Sil Insurance has so far concluded almost 15,000 MTL contracts and has registered over 140 road accidents with 5mln AMD paid as compensation.
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