Medical services prices in Armenia are increasing, leading to a rise   in the loss ratio for medical insurance 

ArmInfo. In Armenia, the growing prices of medical  services have led to an increase in the loss ratio for medical  insurance (both voluntary and with social packages - Ed.), reaching  69% by the end of the first half of 2025, as evidenced by the  Financial Rating of Armenian Insurance Companies as of June 30, 2025,  prepared by ArmInfo Investment Company based on published financial  reports and additional data requested from insurance companies.

The agency's analysts noted that after a decline in this indicator to 40%  in the first half of 2022, there was an increase to 42%, starting  from 2023, which then accelerated to 58%  in the first half of 2024,  continuing  this trend  in 2025.  This increase occurred against the  backdrop of annual rises in medical services costs: 6.7% in 2021,  5.9% in 2022, 12.2% in 2023, 7.9% in 2024, and 7.1% in June 2025.

The highest loss ratio in health insurance for the first half of 2025  was recorded at Efes Insurance Company, which collected 2.6 billion  drams in premiums and allocated the same amount for reimbursements.  Having entered the insurance market two years ago, this insurance  company has taken over from the previous leader in this class, INGO  Insurance Company. It's worth noting that medical insurance accounts  for over 35% of Efes Insurance Company's premium portfolio, while  this class accounts for over 75% of the company's claims. Moreover,  there was a 6.4% year-on-year decline in the former, which was  accompanied by a nearly twofold increase in the latter.

LIGA Insurance Insurance Company holds the second-highest loss ratio  in medical insurance for the first half of 2025, with a 73% loss  ratio, collecting 2.2 billion drams in premiums (a 34% year-on-year  decline) and reimbursing 1.6 billion drams (an 8% year-on-year  decline). Armenia Insurance IC had the lowest loss ratio for health  insurance at 37%. Having collected 1.7 billion drams in premiums over  the first six months, it spent 633.7 million drams on claims,  representing a 52% increase in the former and a 30% decrease in the  latter over the year.

In total, health insurance premiums for 2022-2024 increased from 18  billion drams ($45 million) to 21 billion drams ($52 million), the  lion's share of which came from corporate clients. However, over the  three- year period under review, the number of active contracts in  this class have decreased from 7,000 to 5,600.  As a result, the  ratio of these two indicators indicates a significant doubling of the  cost of an annual policy, from 2 million to 4 million drams. It's  easy to assume that the corporate clientele of Armenian insurance  companies in the health insurance sector includes international  organizations, large companies and enterprises, banks, ministries,  and other budgetary agencies, which, as part of their corporate  social responsibility, place a significant emphasis on employee  health insurance. Moreover, the aforementioned health insurance  policy amounts are more affordable for these entities than for  individuals, which explains the halving of insurance premiums from  the latter over the year, while maintaining impressive revenues from  corporate clients.

Moreover, LIGA Insurance leads in health insurance premiums from both  corporate and retail clients by the end of 2024, with 242 million and  5 billion drams, respectively, while REGO Insurance remains the  underdog, with 10 million and 706 million drams, respectively.  According to the agency experts, the implementation of universal  (compulsory) health insurance (UHI) may be worth hoping for a slight  change in the situation, but a qualitative improvement will likely  take years, as this process requires a massive amount of work and a  shift in mentality to the new reality.

Meanwhile, debates over the nature of UHI continue, with insurers  opposing the Ministry of Health's proposals. The system was  originally planned for launch in 2024, but various models are still  being discussed, and the model proposed by the Ministry of Health  does not comply with the key principles of the insurance system and  cannot be considered as insurance activity. Specifically, insurance  in Armenia is subject to licensing by the Central Bank. However,  under the model proposed by the Ministry of Health, services will be  provided by the UHI Fund, which will not only not be licensed by the  Central Bank but will also not be regulated or supervised by it.  Furthermore, the Ministry of Health's proposed approach to insurance  companies, requiring them to provide only services not included in  the UHI system, such as dental care or palliative care, cannot be  considered a full-fledged partnership between the public and the  private sector. This approach is unacceptable for insurance  companies, as it violates the fundamental principles of insurance.  This model is essentially closer to the social security system, which  is fundamentally different from insurance and not based on its legal  and supervisory mechanisms.