ArmInfo. In the insurance market of Armenia, the loss ratio for compulsory motor third-party liability insurance increased to 79.3% by August 1, 2024 from 64% last year. This is evidenced by the data of the Bureau of Motor Insurers of Armenia.
The growth of the ratio in January-July 2024 was observed against the background of a deterioration in the annual dynamics of the number of active contracts – from 14.6% growth to 1.6% decline, an imperceptible acceleration of the already moderate growth of insurance premiums – from 5.1% to 6.3%, in parallel with which an acceleration of double-digit growth in compensation was recorded from 11.6% to 23.6%.
According to the Bureau, the number of vehicles with compulsory motor third-party liability insurance policies in January-July 2024 increased slightly – by 5.8% per annum (against 5.1% growth a year ago). In quantitative terms, by the beginning of August 2024, there were 668,278 thousand vehicles with MTPL contracts in the country, but the number of active contracts was 732,779 thousand (minus terminated ones – 664,384 thousand).
The excess of contracts over the number of cars is explained by the large number of quarterly (short-term) contracts. In the total number of MTPL contracts, the share of E-policies increased over the year from 24% to 32% or 228,949 thousand, with an acceleration in the annual growth of the number of such contracts from 11.2% to 27.7%. According to the results of 7 months of this year, the volume of insurance premiums collected under current contracts reached 16.2 billion drams ($ 41.9 million), and the volume of insurance compensations exceeded 11.9 billion drams ($ 30.8 million). Moreover, the volume of compensation paid for cases of simplified registration of road accidents (Europrotocol) increased by 28.1% over the year (with an exit from last year’s 14.2% decline) – to 1.3 billion drams, and the average size of one payment accelerated in annual growth from 7.6% to 12.4%, reaching
93,558 thousand drams ($ 241, against $ 216 a year ago). For total insurance compensation, the average size of one payment also accelerated in annual growth from 8.7% to 11.9%, amounting to 256,036 thousand drams ($ 660, against $ 592 a year ago).
In April 2023, the transition to liberalization of tariffs for compulsory motor third-party liability insurance began in the insurance market of Armenia, and an increase in the loss ratio for this class began to be observed within a quarter. Let us recall that in Armenia, since the end of July 2023, there are already 7 insurance companies operating, as EFES Insurance Company has returned to the market, which is currently preparing to enter the compulsory motor third party liability insurance (MTPL) segment. (The calculated exchange rate of the dram against the US dollar as of July 31, 2024 was 388.10 drams/$1, against 386.14 drams/$1 a year earlier on the same date).
