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).