Armenia`s Ministry of Economy proposes subsidizing ensurance premiums  for 2025 agricultural year 

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.