ArmInfo. Since today, compulsory motor vehicle insurance policies (CMTPL) in Armenia have risen in price by 3.000 drams ($6.5).
According to an official report, the decision of the Board of Armenian Motor Insurers' Bureau (approved by the Board of the Central Bank of the Republic of Armenia) dated December 23 last year, aimed at increasing insurance fees through CMTPL, has come into force dictated by an unprecedented increase in insurance compensation last year and thereby a significant increase in the loss ratio this mandatory class of liability insurance.
According to the Bureau, the CMPTL tariff scale has not changed for 10 years already, since its introduction in the country. Despite significant measures for digitalization of services, their automation and their partial transition to the so-called "Europrotocol" method, nevertheless, the level of unprofitability of the CMPTL market could not be reduced. On the contrary, from its 75% top-level, set-up in the original market "design" of this compulsory insurance service, the loss ratio has risen to 85%, and this is without taking into account the commissions of insurance agents.
According to the source, "actuarial calculations show that in order to ensure the stability of the system, the basic insurance premium should increase by at least 3.000 drams a year, risk coefficients should be adjusted, and 'bonus-malus" payments should be balanced."
It should be noted that today a protest action was organized in front of the office of the Bureau by public organizations representing the interests of motor transport drivers. They noted that this decision, which increases the cost of services, was taken behind closed doors without agreement with interested parties, consumers of services, without specialized professional discussion. The campaign organizers and independent experts believe that insurance companies providing CMPTLservices deliberately increase the level of unprofitability of this class of insurance in their reports. So, for example, the institute of damage appraisers works exclusively in the interests of insurers, openly violating the standards and referring to a certain "depreciation" principle, they estimate the damage for old cars (over 70% of the total number of cars operated in Armenia, ed. note) at 3-4 times cheaper. The uncontrolled institution of damage assessors also hides the main corruption risks of the system. Independent experts of the insurance market are convinced that the constant administrative intervention in the market, its constant regulation and restrictions have significantly confused the situation and actually neutralized its natural motivational principles, due to which the logic of the insurance mechanisms ceased to function, creating constant inconsistencies and imbalances for its players and clients
