ArmInfo. The Ministry of Economy of Armenia, which oversees the country's agricultural sector, proposes to fully subsidize the insurance premium for the 2025 agricultural year at the expense of government funds as part of the program for the introduction of agricultural insurance, as well as to provide agricultural entrepreneurs with a subsidy of up to 80% (inclusive) of the insurance premium stipulated by the insurance contract. The initiative is posted on the single portal of legal acts.
The authors of the initiative recalled that the program was launched in 2020. Until 2023, the program indicators increased from year to year. In 2023, 13 agricultural crops were insured for 4 risks, the total area of which is 11,662 hectares. In 2023, the insurance premium amounted to 1.8 billion drams, and compensation was provided in the amount of 2.7 billion drams.
In 2024, due to the high loss ratio recorded in 2023, the reinsurance company left the Armenian market and, in order to reduce the risks of insurance companies, this function was taken over by the RA government, which also subsidized the insurance premium from its own funds.
In 2024, peaches, plums, apples, cherries, watermelons, melons and potatoes were insured against hail, and grain crops (wheat/barley/oats) were insured against drought.
According to the National Agricultural Insurers Agency (AINA), the total insurance premium for the 2024 agricultural year was about 21.9 million drams, 27 insurance contracts were concluded, the total area of insured territories was about 247 hectares. As a result of the concluded contracts, the area of insured orchards and arable land was about 247 hectares.
However, the same problems are present in the 2025 agricultural year, in connection with which this project was developed.
The Ministry of Economy offers state support not only in the issue of subsidizing insurance premiums of business entities, but also through insurance organizations by providing compensation in the event of exceeding a certain threshold of insurance payments.
According to the 2025 project, each insurance company that is a member of AINA will also be compensated for the amount of insurance payments to business entities that exceeds 200% of the total amount of insurance premiums collected by them.
In connection with the adoption of this project, the necessary financing for 2025 will be carried out at the expense of funds allocated from the state budget of the Republic of Armenia to the Ministry of Economy for the implementation of the program.
Eighteen of the 20 existing insurance classes are used in the insurance market of Armenia, with the exception of liability insurance for the use of railway transport and insurance of judicial and extra-judicial expenses. Only 3 companies operate in the class of agricultural risk insurance - LIGA Insurance, INGO and Sil Insurance. Only Armenia Insurance is licensed for railway insurance. INGO and Armenia Insurance are licensed for the largest number of classes - 16 and LIGA Insurance - 15.
