Wednesday, May 17 2023 19:36

ArmInfo. The loss ratio for CMPTL in Armenia in January-April 2023 decreased to 62% from 67% in January-April 2022, being much lower than the pre-Covid 73% in January- April 2019.

This was accompanied by a slowdown in the y-o-y  growth in the number of concluded contracts from 18.7% to 16.9%,  against the background of which there was a slowdown in the growth of  insurance premiums from 20.6% to 9.9% - to $ 21.3 million, at the  same time, the dynamics of compensation increased by 6.9%, from a 15%  drop to $14.2 million, this is evidenced by the data of the Motor  Insurers' Bureau of Armenia.

Thus, according to the Motor Insurers' Bureau , the number of  vehicles with a CMPTL policy in January- April 2023 increased more  modestly than in the pre-Covid comparable period, and the growth in  insurance premiums turned were much lower than the upward trend of  four years ago (16.1% in 2019). In particular, the y-o-y growth in  the number of vehicles with CMPTL policy slowed down from 11.1% to  4.4%, being slightly more modest than the pre-Covid growth of 5.5% in  2019. However, in quantitative terms, the number of vehicles with  aCMPTl policy exceeded not only last year, but also the pre-Covid  indicator - 613,022 thousand pcs against 587.297 thousand pcs. in  2022 and 517.105 thousand pcs in 2019.

At the same time, the y-o-y growth in the number of CMPTL agreements  concluded slowed down, more noticeably moving away from the pre-Covid  growth rates. Thus, during the reporting period, y-o-y growth slowed  down from 18.7% to 16.9%, against the pre-Covid 21.1% in 2019. But in  quantitative terms, the number of CMPTL agreements concluded in  January-April 2023 exceeded the level not only of a year ago, but  also of the pre-Covid similar period - 392,090 thousand pcs against  335.506 thousand pcs in 2022 and 312.672 thousand pcs in 2019. And  the volume of insurance premiums collected on them increased by 9.9%  year-on-year - up to 8.2 billion drams ($21.3 million), against the  pre-Covid 6.4 billion drams (with an increase of 16.1% in 2019). The  average insurance premium per one CMPTL contract amounted to  38,801drams in January-April, and despite the slowdown in y-o-y  growth from 1.7% to 0.5%, the current dynamics are more positive than  the pre-Covid dynamics (2019), when there was a 4.1% decline. 

According to the CMPTL agreements that came into force in  January-April 2023, y-o-y growth also slowed down from 17% to 15.7%,  with an even greater distance from the pre-Covid uptrend (29.7% in  2019), but at the same time with a quantitatively surplus - 401.007  thousand pcs against 350.923 thousand pcs in 2019.  Under these  contracts, the volume of insurance premiums reached 8.9 billion drams  ($23 million), with a slowdown in y-o-y growth from 16.9% to 8.7%,  which  was more modest than even the pre-Covid rates of 10.8%. At the  same time, the number of terminated CMPTL contracts decreased by  15.4% - to 32.308 thousand pcs, while a 3-fold increase was recorded  a year earlier (up to 38.183 thousand pcs), and in pre- Covid 2019  their number, like the current dynamics, decreased by 14.5% (up to  17.861 thousand pcs). And almost the same change in y-o-y dynamics is  recorded in the volume of returned or reimbursable premiums - from a  2.6-fold increase to an 8.2% decline, the absolute value of which in  January-April 2023 exceeded 403.1 million (over $1 million),  moreover, almost the same downward trend (9.5%) was observed in pre-  Covid 2019.

Against this background, the activity of sales of CMPTL E-policies  noticeably decreased to 95,802 thousand pcs for January-April 2023,  with a strong slowdown in y-o-y growth from 64.6% to 6.1%.  Moreover,  in comparison with the current indicators (January-April 2019), the  growth rate slowed down more significantly (from 3.8-fold), but in  quantitative terms, a 9-fold increase is recorded (from 11.028  thousand pcs). As a result, the share of E-policies in the total  number of CMPTL contracts decreased over the year from 27% to 24%,  while significantly exceeding the meager 3.5% in pre-Covid 2019. A  significant slowdown in dynamics can be caused by expectations in  connection with the transition to the liberalization of CMPTL tariffs  from April 1, 2023, which also provides for more noticeable (than the  previously existing 5%) discounts on CMPTL E-policies.

In January-April 2023, 24,492 thousand applications for insurance  compensation were submitted, which is only 0.5% more than a year ago  (against a 12.5% decline in 2022 and a 24.1% growth in 2019). And the  volume of payments on them amounted to 5.5 billion drams ($14.2  million), with a y-o-y growth of 6.9% (against a 15% decline in 2022  and a 14.3% growth in 2019).

 Moreover, 7.390 thousand applications were received in cases of  simplified registration of traffic accidents (according to the  European protocol), with a noticeable slowdown in the y-o-y decline  from 30.1% to 18.9% (against 12.3% growth in 2019). The volume of  compensations paid under the European protocol exceeded 608.3 million  drams or $1.6 million, with a slowdown in the y-o-y decline from  32.7% to 13.2% (against 6.4% growth in 2019), and the average amount  of one payment amounted to 82.319 thousand drams, with a y-o-y growth  of 7% (against a 3.8% decline in 2022 and a 5.3% decline in 2019).  For general insurance indemnities, the average amount of one payment  amounted to 223.724 thousand drams, with a change in the y-o-y trend  from the 2.9% decline to 6.4% growth (against the 8% decline in  2019). In January-April 2023, the number of vehicles with a valid  CMPTL contract increased by 25.725 thousand pcs. In particular, 3 ICs  recorded an increase in this indicator by a total of 42.7 thousand  pcs, while the remaining 3 ICs, on the contrary, had a decline by  17.01 thousand pcs. Moreover, REGO Insurance (previously - RESO) had  the largest reduction - by 7.9 thousand pcs, and Nairi Insurance  continues to provide the largest growth - by 29.4 thousand pcs. This  growth made Nairi Insurance a leader in terms of the number of  vehicles with a valid CMTPL policy - 170,271 thousand pcs (with a  y-o-y growth of 20.8%), displacing LIGA Insurance, which previously  occupied this place, into second place - 167.659 thousand pcs (with a  y-o-y decline of 3.3% or 5.7 thousand pcs), the third place is held  by INGO Armenia - 83.456 thousand pcs (with a y-o-y decline of 4% or  3.4 thousand pcs), Sil Insurance moved up to the fourth place -  75.157 thousand pcs (with a y-o-y growth of 4.3% or 3.1 thousand  pcs), displacing REGO Insurance to the fifth place (formerly RESO) -  65.057 thousand pcs (with a y-o-y decline of 11%), and the sixth  place, as before, is occupied by Armenia-Insurance - 51.422 thousand  pcs (with ay-o-y growth of 25% or 10.2 thousand pcs).

As a result, Nairi Insurance became the leader in terms of the share  of vehicles with a valid CMPTL policy - 27.78%, as well as in terms  of the share of insurance premiums in the total volume of the market  - 27.9%, displacing LIGA Insurance that previously held the lead in  these indicators  to the second place - 27.35% and 26.8% (in terms of  the share of vehicles with CMPTL policy and the share of insurance  premiums). But in terms of the share of indemnities and the coverage  of E-policies CMTPL, the leadership continues to be held by LIGA  Insurance - 28.95% and 45.7%, respectively. The second place in terms  of the share of indemnities, as before, is occupied by Nairi  Insurance - 26.1%, which, in terms of the coverage of E- policies of  CMPTL, moved to the 3rd place - 15.1%, with a meager difference,  losing the second place in this indicator to INGO Armenia - 15.4%.  The third place in terms of the share of insurance premiums,  indemnities, and the share of vehicles with a valid CMPTL policy  continues to be occupied by INGO Armenia - respectively 13.5%, 12.05%  and 13.61%. With a slight difference in the share coverage of the  abovementioned indicators, after INGO Armenia follows Sil Insurance.  And for the remaining 2 ICs, the share of these indicators in the  overall market result is much less. In terms of the number of  contracts, the largest coverage is recorded by Nairi Insurance and  LIGA Insurance - 25.72% and 25.33%, respectively, Armenia Insurance  is in third place (12.84%), Sil Insurance is in fourth place  (12.57%), INGO Armenia raks fifth (12.42%), and REGO Insurance ranks  sixth (11.12%).

It should be noted that there are 6 companies operating in the   insurance market of Armenia, which work on 17 out of the available 20   classes of insurance, with the exception of insurance of railway   transport and liability from its use, insurance of legal and   extrajudicial expenses. In terms of the largest number of classes,  INGO Armenia - 16 (the only one operating under the class of water  transport insurance) and Armenia Insurance- 16 (the only one  operating under the class of insurance of railway transport) are  licensed.

 In the insurance market of Armenia, in December 2022, the insurance  companies RESO and Rosgostrakh Armenia (RGS) went on a rebranding -  in the first case, the change of name to REGO was accompanied by a  change in the composition of shareholders, and in the second case was  simply renamed to LIGA Insurance. As for  INGO Armenia, which is  indirectly owned by the Russian Ingosstrakh, this company continues  to operate in the Armenian market, but with the adjustment of its  actions in the context of sanctions (in relation to Ingosstrakh),  under the close supervision of the regulator. (The estimated exchange  rate of the dram against the dollar as of April 30, 2023 is 386.64  AMD/$1)