Friday, July 14 2023 16:58

ArmInfo. The loss ratio of motor third-party liability insurance (MTPL insurance) was 64% in the first half of 2023 against 65% in the first half of 2022, and 81% in 2021and 73% in 2019. This was accompanied by a liberalization of MTPL prices and slightly lower rates of a 2-digit annual increase in the number of MTPL insurance contracts from 19.7% down to 16.3%, and a slower % increase in insurance premiums, from 21.4% down to 6.5%. A 9.8% increase in insurance indemnities (up to $10.7mln) was recorded against an 8.7% decrease.

According to the Armenian Motor Insurers Bureau, the number of vehicles with MTPL insurance policies was higher in the first half of 2023 against that in the corresponding pre-COVID period, which curbed the increase in insurance premiums not only in annual terms, but also as compared with the pre-COVID period.  Specifically, the number of vehicles with MTPL insurance policies showed a 4.8% year-on-year increase, a much moderate increase as compared with last year's 12.9% and 11.8% in 2019. However, the number of vehicles with MTPL insurance policies reached 623,994 against 595,373 in 2022 and 546,710 in 2019.

The period under review saw a 16.3% increase against 19.7% in the number of MTPL insurance contracts, and 32.9% in 2019. In the first half of 2023, the number of MTPL insurance contracts reached 616,817 against 530,284 in 2022 and 508,130 in 2019. The insurance premiums under the contracts totaled AMD 12.6bln ($32.5mln), a 6.5% year-on-year increase, against 21.4% in 2022, and AMD 10.2bln in the pre- COVID period (with a 25.3% year-on-year increase). The insurance premium under one MTPL insurance contract averaged AMD 38,464, with a 1.6% decrease against a 78% increase in the first half of last year (against a 5.7% decrease in 2019).

The first half of 2023 saw a 15.5% year-on-year increase in the number of effective MTPL insurance contracts (against an 18.4% increase last year and a 29.6% increase in 2019), reaching the pre-COVID rates, with 623,616 contracts signed. Insurance premiums under the contracts exceeded 13.2bln ($30.5mln) with a 6.3% year-on-year increase against 18.5% in 2022 and 14.5% in 2019. A total of 48,474 MTPL insurance contracts were canceled (a 19.3% decrease) against a 2.3-fold increase last year, thus showing a downward trend of 2019. The reimbursed and reimbursable insurance premiums showed a 14.8% decrease against a 2.3-fold increase, with their amount being AMD 607.4mln ($1.6bln).

In the first half of 2023, the number of sold e-MTPL insurance policies showed a decrease, down to 151,001, with a 10.4% year-on-year increase against 53.5%. Much slower rates of increase were recorded as compared with the first half of 2019 (3.8-fold), with a 7.1-fold increase in the actual number of sold insurance policies (from 21,199). The share of e-policies in the total of MTPL insurance contracts showed a year-on-year decrease from 26% to 24%, significantly exceeding the insignificant 4% level recorded in 2019. This "reduced dynamics" is mostly probably the result of the expectations of liberalization of MTPL insurance tariffs, which provides for higher discounts on MTPL insurance policies against the previous 5%.

In the first half of 2023, 36,639 applications for insurance indemnities were submitted, a 1.4% increase as compared with the corresponding period last year (against a 6.7% decrease in 2022 and 20% increase in 2019). The paid indemnities exceeded AMD 8.3bln ($21.5), with a 9.8% year-on-year increase (against an 8.7% decrease in 2022 and a 15.3% increase in 2019). A total of 10,933 applications involved cases of European accident statements, with a year-on-year decrease from 25.3% to 19% (against a 5.6% increase in 2019). The paid indemnities exceeded AMD 911.1mln with a year-on-year decrease from 12.5% to 26.8% (after an accelerating increase from 0.9% to 49.1% in 2019), with one indemnity averaging AMD 226,924, with an 8.4% year-on-year increase (against a 2.7% decrease in 2022 and a 3.9% decrease in 2019).

In the first half of 2023, an additional 28,621 vehicles with effective MTPL insurance contracts was recorded as compared with the first half of 2022. Specifically, four insurance companies recorded 43,900 more contracts, whereas two other insurance companies recorded 15,300 fewer contracts, with the Nairi Insurance company recording the highest increase in the number of contracts - 14,500 more contracts.

The LIGA Insurance company (formerly, RosGosstrakh Armenia) remains leader in the number of vehicles with effective MTPL insurance policies - 178,866 (a 4.3% year-on-year increase or 7,500 effective policies), with the Nairi Insurance company being the second leader, 166,129 (a year-on-year increase of 13.2%), followed by Sil Insurance, 85,443 (a year-on-year increase of 10.6% or 8,200 policies), INGO Armenia, 84,209 policies (a year-on-year decrease of 1% or 827 policies), REGO insurance company, 58,477 policies (a 20% year-on-year decrease), Armenia Insurance, 50,870 policies (a 21.3% year-on-year increase or 8,900).

Six Armenian insurance companies are operating 18 of 20 classes of insurance, except for the Railway Third Party Liability Insurance and legal and extra-judicial expenses insurance. INGO Armenia (the only company providing water transport insurance) and Armenia Insurance (the only company providing rail transport insurance) are the leaders in the number of classes of insurance - 16.

Last December, RECO and Rosgosstrakh companies implemented rebranding projects: the RECO company was renamed REGO, with new shareholders, and the Rosgosstrakh company was renamed LIGA Insurance.  As regards INGO Armenia, which is indirectly owned by the Russia-based Ingosstrakh, the company continues working in Armenia's market, adapted to the sanctions imposed on Ingosstrakh, under the regulator's supervision. (the AMD/USD exchange rate was 386.06/$1 on June 30, 2023).