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.
