Net profit of Armenia`s insurance sector reaches $2.1mln in 1st  quarter of 2025 

ArmInfo. The net profit of the insurance sector of Armenia in the first quarter of 2025 increased by 82.3% per annum (against a 73% decline a year ago) and reached 807.2 million drams ($2.1 million). This was the result of a strong slowdown in the annual decline in premiums from 19% to 7% (20.9 billion drams or $53.4 million) and a reversal in the dynamics of compensation from a significant 43% growth towards a 0.2% decline (10.3 billion drams or $26.2 million). This is evidenced by the data of the Financial Rating of Insurance Companies of Armenia as of 31.03.2025, prepared by ArmInfo IC based on published financial reports and additional data requested from the insurance companies. 

Moreover, in Q1 2025 alone, net profit increased by 42% due to double-digit growth in premiums with a similar decline in  compensation, which was observed a year earlier in Q1 2024, which certainly has a pronounced seasonal nature. If last year this allowed us to zero out the 2023 loss and reach profit (with a 2.6-fold increase), then in the reporting period this allowed us to increase the positive level.

In terms of net profit for the first quarter of 2025, LIGA Insurance took the lead - 384.5 million drams, REGO Insurance moved up to the second position - 155.3 million drams, EFES came in third - 139.3 million drams, Armenia Insurance rose to the fourth position - 133.5 million drams, which moved Nairi Insurance to the fifth position - 36.4 million drams, and pushed INGO Armenia to the sixth position - 2.7 million drams. And only Sil Insurance ended the first quarter of 2025 with a loss of 44.5 million drams. Of the above insurance companies, only one was able to increase its profit over the year (by 19%), two more managed to reduce their losses to zero and reach a  serious profit (4-9 times growth), and of the remaining four  insurance companies, three reduced their profit (by 4-97%) and one went from profit to loss (a decline of almost 3 times). Moreover, the largest increase in profit at Efes Insurance Company (9 times) is explained by the exit from the loss, which was then recorded as the result of its first year of operation.

It is noteworthy that this time the leader in terms of insurance  premiums was taken by Efes Insurance Company - 5.13 billion drams, pushing LIGA Insurance Insurance Company, which previously held the lead, to the second position - 3.51 billion drams, and Nairi Insurance Insurance Company to the third position - 3.45 billion drams. But in terms of compensation, the first two positions are occupied by Nairi Insurance Insurance Company and LIGA Insurance Insurance Company - 2 billion and 1.9 billion drams, respectively, and Efes Insurance Company is in the third position - 1.7 billion drams. Such activity of Efes Insurance Company did not have the best effect on the positions of INGO Insurance Company, pushing it to the  fifth position in terms of premiums and to the sixth position in  terms of compensation (against being in the top three in these  indicators a year ago). Of the seven insurance companies (including Efes), four companies reduced premiums (by 3-32%, with the maximum at Sil Insurance), while the other three showed growth (by 2-68%, with the maximum at REGO Insurance). At the same time, three insurance companies reduced reimbursements year-on-year (by 9-45%, with the  maximum at INGO), while the other four increased this indicator (by 0.2-204%, with the maximum growth of 2-3 times recorded at Efes and REGO Insurance).

The growth rate of both premiums and compensations recorded by Efes Insurance Company is fully explained by the increasing activity in the first year of operation, and it is especially worth noting that the portfolio of this company is formed by the spin-off of the client base from INGO Insurance Company.  However, let us recall that Efes was one of the first companies to form the insurance market in independent Armenia in the late 90s, but it operated under this name until the sale of shares to Ingosstrakh and was called INGO Armenia since December 2004. However, almost a year and a half ago, EFES was revived, quickly gaining momentum with the transition of INGO clients  (former INGO Armenia), whose parent structure ended up on Western sanctions lists, to it.

With the appearance of Efes Insurance Company at the end of July 2023, there are already 7 companies operating in the insurance market of Armenia. Among the currently operating insurance companies, the parent structures of some of them were included in Western sanctions lists in 2022, as a result of which a reorganization process began on the market. In particular, the former companies RESO and Rosgosstrakh  Armenia went for rebranding and a change in the structure of share capital, re-registering as REGO Insurance and LIGA Insurance. The Armenian subsidiary of the Russian company Ingosstrakh - SK INGO (previously called INGO Armenia), from which the insurance company Efes grew, went through a slightly different path of reorganization with a spin-off of the client base.

ArmInfo analysts noted that these two, still affiliated companies, divided between themselves, mainly, the segment of insurance of banking products (INGO) and the segment of medical insurance (Efes). Thus, according to the results of the first quarter of 2025, Efes overtook INGO in health insurance premiums - 1.8 billion against 453.4 million drams, respectively, taking the 1st position in the market in this class, whereas INGO previously held the leadership in the market. And this is not the only class in which Efes not only managed to overtake INGO, but also "squeeze" the championship from it  (property insurance, CASCO, travel insurance, general liability  insurance).

As ArmInfo analysts note, the transfer of financial reporting of  insurance companies to a new format each time hides more and more important indicators from the possibility of analyzing the state of the market. It is worth noting that, unlike the previous reporting format, the new version does not have a unified approach to publishing financial statements, thereby allowing insurance companies to selectively disclose certain balance sheet indicators. This is why ArmInfo IC requests from insurance companies the important data missing in the new format, since it has become difficult for them to analyze the market situation themselves. 

18 of the 20 existing insurance classes are used in the Armenian insurance market, 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 agricultural risk insurance class - LIGA Insurance, INGO and Sil Insurance. Only Armenia Insurance is licensed for railway insurance. The largest number of classes are licensed by SK INGO and Armenia Insurance - 16 and SK LIGA Insurance - 15. (The calculated exchange rate of the dram  to the dollar on 31.03.25 was 391.57 dr/$1)