ARMENIA 1H2013: Steps ahead on the path of development

31 October 2013 — Olesea ADONEV
armenia-statisticsDespite its small overall size, of only EUR 42 million in 1H2013, Armenia is a market worth watching as it shows some interesting novelties. The bonus-malus system was recently introduced on the motor insurance segment, as the new compulsory health insurance or the novelties in preparation for the agricultural insurance changes are only the main features in terms of market development.

The bonus-malus system, and rather one of its components ("bonus"), applies to contracts signed after December 31st, 2012. Thus, the system is already functional in Armenia; however, many drivers are still lacking knowledge about its details.

According to estimates provided by the Executive Director of the Armenian Motor Insurers' Bureau, Anna VARDIKYAN, full implementation of the "bonus-malus" (BMS) over the next few years will lead to a reduction in the number of undisciplined drivers in Armenia by 6-10%. "From the date of implementation of the "bonus" component, the total amount of bonuses (3% of the premium) issued to disciplined drivers, amounted to about AMD 350 million," said Elita BABAYAN, Insurance Specialist, ArmInfo News Agency.

Another interesting new feature of the Armenian market is the introduction of the compulsory health insurance. According to insurers, this product will become unprofitable business for the companies, but a good tool for the promotion and mainstreaming of insurance in society. So, annual payments in health insurance in Armenia increased by almost 10 times and reached AMD 1.6 billion or 33% of total payments in April 1st, 2013. Thus, seven insurance companies collected premiums worth AMD 2.05 billion.

xprimm_insurance_report_1h2013The capacity of the health insurance segment has grown rapidly after the introduction by the Armenian authorities of the social package for budgetary workers. Currently, the state program for the "social package" includes 150,000 budgetary workers.

For the implementation of this program, the government has allocated this year nearly AMD 21 billion. It should be emphasized that the premiums collected under the program accounted for over 90% of health insurance premiums.

The full market analysis article was published in XPRIMM Insurance Report - CEE, Russia&CIS, SE 1H2013. See how you can get a copy.

Access www.xprimm.com and download the 1H2013 Armenian insurance market statistics - Market portfolio & market rankings (in EUR and AMD):
  • GWP
  • Claims
  • Growth rates
  • Market shares

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