ArmInfo. In the insurance market of Armenia, the loss ratio for compulsory motor third-party liability insurance increased to 79.1% by September 1, 2024 from 65% last year. This is evidenced by the data of the Bureau of Motor Insurers of Armenia.
The growth of the ratio in January-August 2024 was observed against the background of a deterioration in the annual dynamics of the number of active contracts - from 13.3% growth to 1.1% decline, an imperceptible acceleration of the already moderate growth of insurance premiums - from 3.7% to 6.9%, in parallel with which an acceleration of double-digit growth in compensation was recorded from 11.9% to 23.7%.
According to the Bureau, the number of vehicles with a compulsory motor third-party liability insurance policy in January-August 2024 increased slightly - by 5.6% y/y (the same as a year earlier). In quantitative terms, by the beginning of September 2024, there were 670,546 thousand vehicles with MTPL contracts in the country, but the number of active contracts was 851,665 thousand (minus terminated ones - 772,165 thousand). The excess of contracts over the number of cars is explained by the large number of quarterly (short-term) contracts. In the total number of MTPL contracts, the share of E-policies increased over the year from 24% to 32% or 265,660 thousand, with an acceleration of the annual growth in the number of such contracts from 11.2% to 27.5%.
According to the results of 8 months of this year, the volume of insurance premiums collected under current contracts reached 18.9 billion drams ($48.6 million), and the volume of insurance compensation amounted to 13.9 billion drams ($35.9 million). Moreover, the volume of compensation paid in cases of simplified registration of accidents (Europrotocol) increased by 27.2% over the year (with an exit from last year's 10.4% decline) - to 1.6 billion drams, and the average size of one payment accelerated in annual growth from 8.1% to 11.4%, reaching 93,356 thousand drams ($241, against $217 a year ago). In terms of total insurance compensation, the average size of one payment also accelerated in annual growth from 9.2% to 11.6%, amounting to 257,603 thousand drams ($665, compared to $598 a year ago).
According to the Bureau, the largest number of vehicles with an MTPL policy are covered by LIGA Insurance Insurance Company - 165.1 thousand units, which also has the highest loss ratio for MTPL at 89%. A slightly smaller number of vehicles with an MTPL policy are covered by Nairi Insurance and Sil Insurance - 138.9 thousand units and 121.6 thousand units, respectively, for which the loss ratio for MTPL is 70% and 84%. The largest volume of insurance premiums under current MTPL contracts are also provided by Nairi Insurance and LIGA Insurance - 4.3-4.1 billion drams (23-22% of the total volume), and they are also leaders in the volume of compensation in this class - 3.2-3.9 billion drams (23-28% of the total volume). LIGA Insurance and Nairi Insurance also have the highest payouts for simplified accident registration (Europrotocol) - 31-22% of the total market volume.
Since April 2023, the transition to liberalization of tariffs for compulsory motor third party liability insurance (CMTPLI) has started in the Armenian insurance market, and after a quarter, the loss ratio for this class began to grow.
Since the end of July 2023, 7 insurance companies have already been operating in Armenia, as EFES Insurance Company has returned to the market, which is currently preparing to enter the compulsory motor third party liability insurance (CMTPLI) segment. (The calculated exchange rate of the dram against the US dollar as of 31.08.2024 was 387.53 drams/$1, compared to 385.78 drams/$1 a year earlier on the same date).
