Wednesday, April 28 2021 15:23
Karine Melikyan

ArmInfo financial rating: Travel insurance goes deeper into the  negative

ArmInfo financial rating: Travel insurance goes deeper into the  negative

ArmInfo. In the first quarter of 2021, the share of the corporate component in the premium portfolios of Armenian insurers significantly exceeded the retail component -  64.9% (10.6 billion drams) and 35.1% (5.7 billion drams). AMD),  almost repeating the figures of a year ago - 64.2% and 35.8%,  respectively.

According to the Financial Rating of insurance  Companies in Armenia prepared by ArmInfo IC, the capacity of the  retail insurance market grew by a modest 1.4% from a more meager 0.3%  a year earlier, while the dynamics of corporate insurance went from a  6.5% decline to a 4.5% increase.

According to the results of the first quarter of 2021, corporate  insurance prevails in the premium portfolios of five companies, and  only RESO Insurance Company dominates retail. The largest gap between  corporate and retail insurance remains in the IC "INGO Armenia" -  75.1% against retail 24.9%, and the smallest gap in the IC "Nairi  Insurance" - 54.6% against retail 45.4%. And only the retail  component dominates the IC "RESO" - 55.3% against the corporate  44.7%. A year earlier, in the first quarter of 2020, INGO Armenia was  also the most dominant corporate portfolio in premiums (80.9%), and  the only one with a dominant retail component was again IC RESO  (60.8%).

In the structure of insurance reimbursements in the first quarter of  2021, the share of payments to retail customers accounted for 64.8%  or 4.5 billion drams, corporate-35.2% or 2.5 billion drams, compared  to 68.7% and 31.3%, respectively, a year earlier. At the same time,  the acceleration in the growth of compensation to legal entities from  12% to 23% was accompanied by a slowdown in the growth of payments to  individuals from 5% to 3%. During the reporting quarter, the  compensation portfolio of three companies was dominated by the  corporate component (with a maximum of INGO Armenia - 53.7%), and the  other three - by the retail component (with a maximum of Rosgosstrakh  Armenia - 89.6%), while a year earlier the only IC with a corporate  dominant was INGO Armenia (50.3%) and the maximum retail dominant was  Rosgosstrakh Armenia (94.1%).

In the structure of premiums listed for reinsurance, the share of  corporate insurance in the first quarter of 2021 amounted to 81.6% or  2.2 billion drams (with a reversal of the annual dynamics from a 37%  decline to a 26% increase), and retail insurance-18.4% or 486.9  million drams (with an acceleration of annual growth from 51% to 2.6  times), compared to 90.1% and 9.9%, respectively, a year earlier. The  largest share of the corporate component in the premiums listed for  reinsurance was recorded by Rosgosstrakh Armenia Insurance Company -  95% against retail 5%, and the smallest share by Sil Insurance  Insurance Company-65.1% against retail 34.9%. A year earlier, the  largest gap between the corporate component and the retail component  was distinguished by SC "Armenia Insurance" - 98.4% vs. 1.6%, and the  smallest - SC "RESO" - 80.5% vs. 34.9%.

Armenian insurers concluded 404,710 contracts in the first quarter of  2021, which is 4.1% less than the number of contracts a year ago  (compared to 0.8% growth a year earlier). Thus, the number of  insurance contracts in force as of April 1, 2021 amounted to 908,320  with an annual decline of 8.9% (against a 7.6% increase a year  earlier). Among the classes, the leading position in the number of  contracts concluded is held by CTP-in the first quarter more than  229.1 thousand, the number of existing contracts for which by April 1  exceeded 503.2 thousand. Of the voluntary types of insurance, the  most popular is accident insurance, for which 75.8 thousand contracts  were concluded in the first quarter, and the number of active  contracts by April 1 exceeded 226.4 thousand. And the next position  in demand is held by medical insurance, for which the number of  existing contracts by April 1 reached 69.9 thousand, of which 64.2  thousand. concluded in the first quarter.

In terms of the number of contracts in force by April 1 in the CTP  segment, Rosgosstrakh Armenia is the leader - 156.7 thousand (of  which 68 thousand were concluded in the first quarter), which holds  the lead and in terms of the number of contracts in the health  insurance segment - 39.8 thousand (of which 37.5 thousand were  concluded in the first quarter). The leader in the number of  contracts in the accident insurance segment is INGO Armenia - 102.4  thousand valid as of April 1 (of which 48.3 thousand were concluded  in the first quarter). According to CASCO, the championship is held  by Nairi Insurance (4.9 thousand contracts in force on April 1, of  which 1.4 thousand are valid). concluded in the first quarter). In  the insurance of those traveling abroad, the largest number of  contracts is distinguished by IC "INGO Armenia", which had 1.1  thousand active contracts by April 1, but the number of contracts  concluded only in the first quarter was higher - 2.3 thousand.

In terms of the number of contracts concluded in the first quarter,  the first position is occupied by SC "Rosgosstrakh Armenia" - 129.3  thousand, the second - SC "INGO Armenia" - 97.1 thousand, the third -  SC "Nairi Insurance" - 57.6 thousand, the fourth - SC "RESO" - 50.8  thousand, the fifth - SC "Sil Insurance" - 43.2 thousand, the sixth -  SC "Armenia Insurance" - 26.7 thousand. For all six companies, the  dominant position in the concluded contracts is CTP with a maximum of  Armenia Insurance (89.3%) and a minimum of INGO Armenia (37.7%).

The largest annual decline in the number of contracts concluded in  the reporting quarter was recorded for travel insurance (by 60.5%),  and in the same class there is the most significant reduction in the  number of contracts in force on April 1 (by 78.1%). The decline in  contracts concluded during the quarter was also recorded for cargo  transportation insurance-by 10.3%, while the growth of contracts in  force at the reporting date was 6.6%. The decline in both contracts  concluded during the quarter and those in force at the reporting date  also appears for general liability insurance (by 12.2-13.7%) and CTP  (by 6.1 - 6.5%). A noticeable improvement in the annual dynamics is  recorded by the contracts concluded during the quarter in the CASCO  segment - with the exit from the 10.3% decline to 41.7% growth, but  at the same time the growth in the number of contracts in force at  the reporting date for this class has slowed down significantly -  from 24.5% to 9.1%.

Recall that there are 6 companies operating in the insurance market  of Armenia, operating from the existing 20 classes of 17, with the  exception of insurance of railway transport, liability from the use  of railway transport, insurance of judicial and non-judicial  expenses. Since 2019, at the request of the Central Bank of the  Republic of Armenia, the line insurance of seismic risks (from  earthquakes) has been added to the financial reports for the  portfolio, and since the second quarter of 2020, the line insurance  of agricultural risks (agricultural insurance) has been added, the  data for which are not taken into account in the results, since they  are already included in the corresponding insurance classes.   According to the largest number of classes, the IC "INGO Armenia" -  16 (the only one operating in the class of water transport insurance)  and the IC "Rosgosstrakh Armenia" - 15 are licensed. (The estimated  exchange rate of AMD to the dollar as of 31.03.21 was 531.17  drams/$1). 

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