Friday, November 15 2019 13:35
Karine Melikyan

Financial Rating of Rating ArmInfo: In the insurance market of  Armenia, the growth of premiums and indemnities is slowing

Financial Rating of Rating ArmInfo: In the insurance market of  Armenia, the growth of premiums and indemnities is slowing

ArmInfo.  Premiums of Armenian  insurance companies increased over the 9 months of 2019 by 18.6% per  annum, with an increase in indemnities of 25.5%, against an increase  of 25% and 36.5%, respectively, a year earlier.

For the III quarter  of 2019 alone, premiums outperformed the 42.1% decline by 4% growth,  with a sharp acceleration in the growth of payments from 0.3% to  46.4%, while a year earlier in the III quarter both premiums and  refunds showed a way out of recession by 5.8% and 26.7% growth,  respectively. By October 1, 2019, the total amount of insurance  premiums amounted to 35.5 billion drams, and the amount of insurance  claims - 21.03 billion drams (the figures are given from the reports  of the IC according to IFRS standards). According to the Financial  Rating of Armenian Insurance Companies prepared by ArmInfo Investment  Company, as a result, the insurance system totaled 9 months of 2019  with a net profit of over 1.1 billion drams, ensuring an annual  growth of 3 times with a quarterly decline of 34%.

According to the reports of UK portfolios according to the standards  of the Central Bank of the Republic of Armenia, insurance premiums  amounted to 36.5 billion drams (with a slowdown in annual growth from  24.3% to 19.7%), and reimbursements - 18.2 billion drams (with a  sharp slowdown in annual growth from 37.9% up to 9.9%). In annual  terms, an increase in premiums and indemnities was shown by 5  insurance companies, and only in the 3rd quarter, an increase in  premiums in 4 insurance companies was accompanied by an increase in  indemnities in all 6 insurance companies.

The leader in terms of collected premiums is INGO Armenia IC with a  portfolio of 11.04 billion drams, the second position continues to be  occupied by IC Rosgosstrakh Armenia - 10.2 billion drams. Nairi  Insurance IC secured the third position - 5.2 billion drams, the Sil  Insurance IC fourth position - 4.2 billion drams. The fifth and sixth  positions, as before, are occupied by RESO IC and Armenia Insurance  IC with premiums of 3.3 billion and 2.6 billion drams, respectively.

In January-September 2019, the largest share in the structure of  insurance fees fell to compulsory motor liability insurance - 47.3%  or 17.3 billion drams (annual growth of 20.5%). In second place is  health insurance - 27.4% or 9.99 billion drams (annual growth of  9.7%). Third place was insurance of property risks (from fires and  natural disasters and other damages) - 8.3% or 3.05 billion drams  (annual growth of 47.6%). The fourth position was assigned to CASCO -  4.9% or 1.8 billion drams (an increase of 22.1% over the year), the  fifth is insurance against accidents - 3.8% or 1.4 billion drams (an  increase of 32, 8%).  In addition, for 8 insurance classes, Armenian  insurers collected over 3 billion drams.

 For the 3rd insurance classes (water transport insurance, liability  insurance for the use of water transport and insurance of guarantees  provided), Armenian insurers did not conclude a single contract  during the reporting period.

As a comparison, we note that in January-September 2018, the share of  total insurance premiums in the total insurance premium amounted to  46.97%, medical insurance - 29.9%, property risk insurance (from  fires and natural disasters and other damages) - 6.8%, hull insurance  - 4.8%, accident insurance - 3.5%. For the remaining 8 insurance  classes, the fees amounted to AMD 2.8 billion, with a zero indicator  for 4 types (water transport insurance, liability insurance for using  water transport, insurance of guarantees provided and credit risk  insurance). In January-September 2018, premiums for health and  accident insurance showed a significant annual increase - by 88.5%  and 81.4%, respectively, with a significantly modest increase in  premiums for hull insurance (by 5.6%) and compulsory motor  third-party liability insurance (by 4 ,one%).  Recall that in the  insurance market of Armenia there are 6 companies working out of the  existing 20 insurance classes of 17 each, with the exception of  railway transport insurance, liability from the use of railway  transport, insurance of legal and extrajudicial expenses. Moreover,  since 2019, in the financial reports on the portfolio of all 6  insurance companies, at the request of the Central Bank of the  Republic of Armenia, a line of insurance of seismic risks (from  earthquakes) was added, the data for which, although separately  indicated, is not included in the results, since they are already  included in the corresponding insurance classes. In the largest  number of classes, INGO Armenia IC was licensed - 16 (the only one  operating in the water transport insurance class) and Rosgosstrakh  Armenia IC - 15, followed by Nairi Insurance IC and Armenia Insurance  IC - 12 classes each, IC "RESO" and SK "Force Insurance" - 11 classes  each. (Estimated AMD / USD exchange rate for 09/30/19 is 475.97 dr./$  1).

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10 billion

Volume of T-bills for placement

200 million

Volume of submitted competitive applications

200 million

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200 million

Yield at cut-off price

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