Wednesday, July 29 2020 14:12

ArmInfo.The total net profit of insurance companies in Armenia in the first half of 2020 jumped 4.4 times against the same period last year (against 71% growth a year  earlier), exceeding AMD 3.3 billion or $ 6.9 million.

According to the Financial Rating of Armenian Insurance Companies, prepared by IC  ArmInfo, the acceleration of the growth of this indicator was  observed against the background of the reversal of the dynamics of  insurance premiums and compensations from 18.7-16.5% growth towards  7.7-7% decline. And this is the result of the fact that the majority  of insurance companies recorded a deterioration in the dynamics of  premiums, with three entering a decline, and the other three with a  significant slowdown in growth, and the same picture was observed in  claims, but with a decline in only two insurance companies. It should  be noted that the second quarter fell on the extended period of the  State of Emergency (from March 16 to August 13) due to the  coronavirus pandemic, during which many types of economic activities  were temporarily prohibited in the first two months and only from May  18 the ban was lifted , but so far the activity of international air,  rail, and bus communication is limited, and the activities of  catering and services have only partially resumed.

On a quarterly basis, the net profit of insurers maintained high  growth rates, but with a slight slowdown from 3.5 times in the first  quarter to 2.6 times in the second quarter, while a year earlier  there was an acceleration of the upward quarterly trend from 3 times  to 4 times ... And this was observed against the background of a more  impressive deterioration in the reporting quarter of the dynamics of  premiums from 27.1% growth to 47.9% decline, rather than  compensations, which also reversed the trend from 3.9% growth to  23.9% - th recession. As a comparison, we note that in Q2 2019 the  deterioration in the dynamics of premiums was similar - from 59.8%  growth to 42.1% decline, and the trend of refunds, on the contrary,  showed a way out of the 7% decline to 0, 3% growth.

The first place in terms of net profit for the first half of 2020 was  taken by INGO Armenia IC - 968.4 million drams (an annual growth of  4.6 times). IC "Armenia Insurance" moved up to the second place with  a profit of 894.3 million drams (annual growth of 7.7 times),  displacing the former leader - IC "Nairi Insurance" - to the third  position with a profit of 831.7 million AMD (annual growth of 2  times). IC "Rosgosstrakh Armenia" moved up to the fourth place with a  profit of 386.8 million drams (an annual growth of 5.5 times, with an  exit from the loss), displacing the IC "RESO" to the fifth position  with a profit of 198.9 million AMD (annual growth of 75.5%). And the  list of ICs is closed by the level of net profit of IC "Seal  Insurance" - 64.7 million drams (annual growth by 2.2 times).

The decline in premiums and indemnities reduced the profit on the  insurance line in the first half of 2020 by 8.3% per annum - to 12.4  billion drams, against an increase of 20.6% a year earlier. Moreover,  only in the second quarter of 2020 this indicator decreased  impressively - by 64.6%, having moved down from 50.7% growth in the  first quarter, which was observed at a more significant pace in 2019  - from 2.8 times in Q1 to 67.3% decline in Q2. Insurance profit for  the first half of 2020 was the leading one for IC "INGO Armenia" -  3.7 billion drams (reversal of annual dynamics from 72.6% growth to  23.8% decline), in second place - IC "Rosgosstrakh Armenia" "- 3.5  billion drams (slowdown of annual growth from 4% to 0.2%), and the  third position was held by IC" Nairi Insurance "- 2.1 bln AMD  (reversal of the annual trend from 32.8% decline to 33.5% growth).  The decline of this indicator appears in four insurance companies -  4.7- 32.2% (maximum for IC RESO), and growth for two - 0.2-33.5%  (maximum for IC Nairi Insurance).  It should be noted that 6  companies operate in the insurance market of Armenia, which out of  the available 20 classes of insurance operate in 17, except for  insurance of railway transport and liability from its use, insurance  of judicial and extrajudicial expenses. Since the second quarter of  2020, the insurance class for agricultural risks has been added to  the IC reports, but it is not added to the final indicator, since it  is taken into account in two other types of insurance: property  against fires and natural disasters; property from other damages. In  terms of the largest number of classes, INGO Armenia IC is licensed -  16 and Rosgosstrakh Armenia IC - 15. (The estimated exchange rate of  the dram to the dollar as of June 30, 2020 was 482.36 dr.