CMTPL e-policies continue to grow rapidly in Armenia, approaching  quarter of total number of contracts

ArmInfo. In Armenia, the number of vehicles with CMTPL policy is gradually recovering its growth rates, allowing the increase in fees to gain momentum. Thus,  according to the Bureau of Motor Insurers of Armenia, their number  increased by 9.6% per annum in 2021, with an exit from the 12.4%  decline in 2020, but so far is much inferior to the pre-Covid  ascending 18.5% in 2019.

 And in quantitative terms, for 2021, it was  possible to come closer to the pre-Covid level- 578.521 thousand  units against 602.457 thousand units.

The resumption of growth in the number of CMPTLcontracts was also  significantly lower than the growth rate before the pandemic. Thus,  over the reporting year, the dynamics changed from a decline of 12.9%  to an increase of 9.9%, while significantly yielding to the pre-Covid  growth in 2019 by 23.5%. As a result, in 2021, fewer CMPTL agreements  were concluded than in pre-Covid 2019 - 1.023 million units against  1.202 mln. And the volume of insurance premiums collected on them  exceeded 22.921 billion drams ($47.7 million), against pre-Covid 24.2  billion drams. 

The average insurance premium for one CMPTL contract in the reporting  year amounted to 22,406 drams, with a reversal of y-o-y dynamics from  12.6% growth to 1% decline (against 7.3% decline in 2019).

The same growth was observed for CMPTL contracts that came into  effect in the reporting year - by 9.9% (against a 22.7% decline in  2020 and a 32.8% growth in 2019), amounting to 1.025 million units.  Under these contracts, the volume of insurance premiums amounted to  22.976 billion drams ($47.9 million), resuming growth, but at a rate  below the pre-Covid level - 8.6% against 19.4%.

At the same time, the number of terminated CMPTL contracts continues  to grow significantly - 3.1-fold in 2021, amounting to 90.006  thousand units, while in 2019-2020 their number was declining  rapidly. And the volume of returned or refundable premiums has  increased by almost the same amount - 2.7-fold, exceeding 1.106  billion drams ($2.3 million).

Against this background, high sales activity of CMPTL e-policies  remains - 234.808 thousand units, despite a more pronounced slowdown  in growth in 2021 to 73.4% than was observed in 2019-2020 - from  3.6-fold to 3-fold. As a result, the share of e-policies in the total  number of CMPTL agreements increased in 2021 to 23% from 15% in 2020,  significantly exceeding the pre-Covid 5% in 2019.

78,255 applications for insurance compensation were submitted in  2021, which is 17.5% more than a year ago (against a 15.5% decline in  2020 and a 17% growth in 2019). And the volume of payments on them  exceeded 16.4 billion drams ($34.2 million), with a y-o-y growth of  13.7% (against a 7% decline in 2020 and 11.6% growth in 2019).  Moreover, 34,690 applications turned out to be in cases of simplified  registration of road accidents (according to the European Protocol),  the y-o-y dynamics of which changed from a 20.6% decline in 2020 to a  24.1% growth in 2021, far exceeding the upward 2.2% in pre-Covid  2019. The volume of compensations paid under the European protocol  reached 3.3 billion drams with the change of the y-o-y dynamics from  a 59.5% growth (after the acceleration of the decline in 2019-2020  from 8.7% to 17.4%), and the average amount of one payment amounted  to 94.082 thousand drams , with an acceleration of y-o-yl growth from  4.1% to 28.6% (against a decline of 10.7% in 2019). For general  insurance claims, the average amount of one payment decreased by 3.2%  (against a 10.1% increase in 2020 and a 4.7% decline in 2019),  amounting to 209.844 thousand drams.

The loss ratio for CMPTL increased in 2021 to 79% from 65% in 2020,  exceeding even the pre-Covid 74% in 2019.

In 2021, the number of vehicles with a valid CMPTL contract increased  by 50.805 thousand units. In particular, 5 ICs recorded an increase  in this indicator by a total of almost 57.2 thousand units, while one  IC, on the contrary, had a decline by 6.4 thousand units. Moreover,  the only reduction was observed in Armenia Insurance - by 6.4  thousand units, and the largest increase in Nairi Insurance - by 23.2  thousand units. Nevertheless, Rosgosstrakh Armenia Insurance Company  continues to be the leader in terms of the number of vehicles with a  valid CMPTL policy - 173,547 units, (with  a y-o-y growth of 0.4% or  643 units), the second lace is held by Nairi Insurance - 134.634  thousand units (with a y-o-y growth of 20.8%), the third - INGO  Armenia - 88.716 thousand units, (with a y-o-y growth of 12.5% or 9.9  thousand units), on the fourth - RESO - 74.062 thousand units, (with  a y-o-y growth of 17% or 10.8 thousand units), on the fifth - Sil  Insurance - 65.525 thousand units, (with a y-o-y growth of 24.2% or  12.8 thousand units), and the sixth - Armenia Insurance - 42.037  thousand units, (with a y-o-y decline of 13.2%).

Rosgosstrakh ArmeniaIC also holds the lead in terms of the share of  insurance premiums in the total volume in the market - 30.3% (against  33% in 2020), in terms of the share of reimbursements - 31.86%  (against 32.47% in 2020 ), and already covers 49.5% of CMPTL  e-policies (against 47.9% in 2020). This company continues to occupy  the leading place in terms of the share of vehicles with a valid  CMPTL policy - 30%, with a return to the level of 2019 (30.6%) and a  decrease from the bar of 2020 (32.76%). The second place in these  indicators is held by Nairi Insurance: in terms of the share of  insurance premiums - 23.7%, in terms of the share of indemnities -  19.35%, in terms of the number of e-policies of CMPTL - 15.8%, in  terms of the share of vehicles with valid CMPTL policy - 23.27%. And  the third place  is occupied by INGO Armenia IC - 15.3%, 13.73%,  12.5%, 15.33%, in terms of premiums, compensations, e- policies, the  number of insured vehicles, respectively. For the other three ICs,  the share of these indicators in the total market is much smaller.

It should be reminded that in Armenia, the system of registration of  insured  claims for Euro-protocol in the CMTPL market was introduced    in March 2016, initially with a damage threshold of up to 50 thousand    drams, subsequently in September of that year increased to 100  thousand drams from September of the same year, with a subsequent  increase from August 2020 to 200 thousand drams. And at the beginning  of 2020, from February, it became possible to issue insured claims  according to the European protocol through the ASWA mobile  application. On-Line sales of CMPTL policies (E-policies) started  from November 2017 with a 5% discount. A month later, from December  2017, it was possible to purchase policies through payment terminals  with the cash-in function.  It should be noted that there are 6  insurance companies in Armenia, operating from the existing 20  classes of 17, with the exception of railway transport insurance,  liability from the use of railway transport, insurance of legal and  extrajudicial expenses. According to the largest number of classes,  INGO Armenia is licensed  16 (the only one working in the class of  water transport insurance) and Rosgosstrakh Armenia - 15. (As of  December 31, 2011, the estimated exchange rate of the dram against  the dollar was 480.14 AMD/$1).