Monday, September 4 2023 16:59

ArmInfo.In the Armenian insurance market, the CMPTL loss ratio has been at the level of 64%  for a year now, which is much lower than 79% in Jan-July 2021 and the  pre-Covid 72% in the same period of 2019.

Such dynamics were observed  against the background of the transition of CMPTL tariffs to the  liberalization from April 2023, under which, in Jan-July, there was a  slight slowdown in the y-o-y  double-digit growth of the number of  signed contracts, from 19.6% to 15.3%, a more noticeable slowdown in  the growth of insurance premiums,  from 19.8% to 5.1%, and a reversal  of the recovery trend from a decline of 9.4% to an increase of 11.6%,  according to the data of the Bureau of Motor Insurers of Armenia.

Thus, according to the Armenian Motor Insurers' Bureau, the number of  vehicles with a CMPTL policy increased in Janu-July 2023 more  modestly than in the pre-Covid comparable period, which greatly  slowed down the growth in insurance premiums not only in y-o-y terms,  but also in comparison with the pre-Covid period. In particular, the  number of vehicles with a CMPTL policy increased by 5.1% per annum in  Jan-July 2023, which was much more restrained not only last year's  pace (11.5% y/y), but also the pre-Covid upward pace of 11.9% in  2019. However, in quantitative terms, by August 2023, there were  already 631.906 thousand such vehicles, against 601.125 thousand  units in 2022 and 556.862 thousand units in pre-Covid 2019.

A slowdown in growth rates, moving away from such growth rates, was  also observed in the number  of CMPTL agreements concluded. Thus,  during the reporting period, y-o-y growth slowed down from 19.6% to  15.3%, much lower than the pre-Covid rising rates of 32.6% in 2019.  But in quantitative terms, in Jan- July 2023, more CMPTL agreements  were concluded than a year ago, and even in the pre-COVID period. -  736.278 thousand units, against 638.353 thousand units in 2022 and  611.589 thousand units in 2019. And the volume of insurance premiums  collected on them increased by 5.1% per annum, slowing down at a pace  from 19.8% in 2022 and from 24.6% in 2019, exceeding 14.7 billion  drams ($38.2 million). The average insurance premium for one CMPTL  contract in the reporting period amounted to 38,059 drams, with a  reversal of y-o-y dynamics from 0.2% growth towards a 2.8% decline  (against 6.1% decline in 2019).

A slower growth was also observed for CMPTL agreements that came into  force during the reporting period - by 14.6% (against 18.8% growth in  2022 and 31.5% growth in 2019), amounting to 744.596 thousand. Under  these contracts, the volume of insurance premiums amounted to 15.4  billion drams ($39.9 million), with a slowdown in y-o-y growth to  4.9% from 17.9% in 2022 and 14.9% in 2019.  At the same time, the  number of terminated CMPTL contracts began to decrease - by 18.6%  (after a2.1-fold increase in 2022), amounting to 57.471 thousand,  thereby returning to the downward dynamics of pre- Covid 2019. And  the same trend reversal was observed in the volume of returned or  repayable premiums - from a 2-fold increase to a 15.7% decline - to  709.6 million ($1.8 million).

Against this background, the activity of sales of CMPTL  E-policies  has noticeably decreased to 179,250 thousans, for January-July 2023,  with a slowdown in y-o-y growth from 47.5% to 11.2%. Moreover, in  comparison with the pre-Covid indicators of the comparable period  (Jan-July 2019), the growth rate slowed down even more significantly  (from 3.6-fold), but in quantitative terms, a sharp increase of 6.7  -fold is recorded (from 26.866 thousand units). As a result, the  share of E-policies in the total number of CMPTL contracts decreased  over the year from 25% to 24%, while significantly exceeding the  meager 4% in pre- Covid 2019. A significant slowdown in dynamics is  likely due to expectations from the liberalization of CMPTL tariffs,  which also provides for more noticeable (than the previously existing  5%) discounts on CMPTL E-policies.

In Jan-July 2023, 42,285 thousand claims for insurance compensation  were submitted, which is 2.7% more than a year ago (against a 7.7%  decline in 2022 and an 18.7% growth in 2019). And the volume of  payments on them reached 9.7 billion drams (over $25 million), with  ay-o-y growth of 11.6% (against a 9.4% decline in 2022 and a 14.1%  growth in 2019). Moreover, 12.605 thousand claims were in cases of  simplified registration of road accidents (according to the European  protocol), with a slowdown in the y-o-y decline from 24.1% to 20.3%  (against 5.7% growth in 2019). The volume of reimbursements paid  under the European protocol exceeded 1 billion drams with a slowdown  in the y-o-y decline from 25.4% to 14.2% (after an acceleration of  growth from 0.2% in 2019 to 49.4% in 2021), and the average amount  one payment amounted to 83.242 thousand drams, with the output of the  y-o-y dynamics from the 1.8% decline to 7.6% growth, which was also  observed at higher rates in 2019-2021 - from the 5.2% decline to 15%  growth. For general insurance claims, the average amount of one  payment amounted to 228.723 thousand drams, with a reversal of the  y-o-y trend from a 1.9% decline to an 8.7% increase (against the  pre-Covid downward trend of 3.9% in 2019).

In Jan-July 2023, compared to the same period in 2022, the number of  vehicles with a valid CMPTL contract increased by 30,781 thousand. In  particular, 4 ICs recorded an increase in this indicator by a total  of 50.3 thousand pcs, and 2 ICs, on the contrary, a decrease by 19.5  thousand pcs. Moreover, the largest reduction was observed in REGO  Insurance (the former RESO) - by 17.5 thousand pcs, and LIGA  Insurance provided the largest increase - by 15.7 thousand pcs. And  it is LIGA Insurance Insurance Company (the former Rosgosstrakh  Armenia) that continues to be the leader in terms of the number of  vehicles with a valid CMPTL policy - 185,973 thousand pcs (with a  y-o-y growth of 9.2%), the second place is held by Nairi Insurance -  163.169 thousand pcs(with a y-o-y growth of 8.5% or 12.818 thousand  pcs), SIL Insurance moved up to the third place - 90.162 thousand   pcs(with a y-o-y growth of 16.6% or 12.809 thousand pcs), displacing  INGO Armenia to the fourth place - 83.689 thousand pcs (with an  annual decline of 2.3% or 1.98 thousand pcs), the fifth place is  occupied by REGO Insurance - 56.695 thousand pcs (with a y-o-y  decline of 23.6%), and the sixth place, as before, is occupied by  Armenia-Insurance - 52.218 thousand pcs (with a y-o-y growth of 20.6%  or 8.9 thousand pcs).

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). (As of July 31, 2023, the estimated exchange rate of  the dram against the dollar is 386.14 AMD/$1).