Attempt of insurance sector to get out of loss for profit in Q2 was crowned with success

ArmInfo. The attempt of the Armenian insurance sector to get out of the loss for profit in Q2 2021 was crowned with success, but the received amount of 94 million drams ($ 189 thousand) was insufficient to zero out the six-month loss. According to the Financial Rating of insurance companies in Armenia, prepared by ArmInfo IC, the total loss of 6 insurance companies for H1 2021 was amounted to 130.6 million drams (over $ 263.4 thousand), with a 2-fold y-o-y drawdown (from plus to minus level), with a quarterly 2.5-fold growth (reaching the plus level).

The half-year loss was triggered by a strong 40.7% y-o-y growth in reimbursements and a modest 8.9% increase in premiums, while both indicators in Q2 were in decline - premiums by 39.3% and reimbursements by 5.5%.

On a y-o-y terms (from H1 2021 to H1 2020), three ICs moved out of profit at a loss, and the other three ICs greatly reduced profits. In the quarterly terms (for Q2), only two ICs stayed in the red, one IC came out of the loss for profit, and the other three ICs increased profits several times, due to which the total indicator for the sector reached a positive level, the value of which turned out to be less than the minus level of Q1, which did not allow for a positive financial result in H1 2021. The y-o-y dynamics of the H1 2021 turned out to be negative in terms of premiums for two insurance companies, and in terms of reimbursements - for one insurance company, which made it possible to maintain a twofold dominance of total premiums over compensations. On a quarterly terms, a significant decline in premiums for all 6 insurance companies, with a moderate reduction in reimbursements for four insurance companies, greatly reduced the gap between premiums and reimbursements from 2-fod to 1.3-fold.

The first place in terms of net profit for H1 2021 was taken by INGO Armenia IC - 247.9 million drams (with a y-o-y decline of 74.4% and a 2.7-fold quarterly increase of the positive level). The second place was taken by "Armenia Insurance" - 208.3 million drams (with a y-o-y decline of 76.7% and a 3-fold quarterly increase).  "Nairi Insurance" is on the third place - 100.2 million drams (with a y-o-y decline of 88% and a3-fold quarterly increase). The fourth, fifth and sixth places were taken by RESO IC, SIL Insurance IC and Rosgosstrakh Armenia IC, the total loss of which amounted to 686.9 million AMD, thus exceeding the total plus 556.3 million AMD of the remaining 3 ICs.

A significant growth in reimbursements with a modest increase in premiums accelerated the y-o-y decline from 8.3% to 19.3%, to the level of 10.2 billion drams. The dynamics of profits in the insurance line and in the quarterly terms worsened, turning from 67.5% growth to 73.3% decline, and one insurance company entered the negative reduction of the plus level.

Income from insurance for H1 2021 was led by INGO Armenia IC- 3.7 billion drams (with a y-o-y decline of 0.5% and quarterly - by 47.6%), in second place - Rosgosstrakh Armenia IC - 1.76 billion drams (with a y-o-y  decline of 50.2% and a 2.3-fold quarterly drawdown ), and the third position was held by "Nairi Insurance" - 1.75 billion drams (with a y-o-y and quarterly decline of 15.9% and 13.2 % , respectively).  The fourth place is taken by "Armenia Insurance" - 1.15 billion drams (with a y-o-y growth of 7.9% with a quarterly decline of 39.9%). The fifth and sixth places in this indicator are occupied by SIL Insurance and RESO IC -1.09 billion drams and 735.9 million drams, respectively, with a y-o-y decline of 24.3-5% and a quarterly decline of 75-51%.

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, with the exception of insurance of railway transport and liability from its use, insurance of judicial and extrajudicial expenses. Since Q2 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, 21 was 495.86 AMD / $ 1).