ARMENIA: Demand for motor third party liability insurance not to decline even if it suddenly becomes voluntary

6 May 2015 —
The demand for the motor third party liability (MTPL) insurance will not decline even if it suddenly becomes voluntary, because the car owners realize how beneficial the MTPL insurance is, Samvel Grigoryan, CEO of RESO insurance company, has told ArmInfo.

He says that a few years ago, MTPL insurance was perceived as a compulsory duty in the state's favor.  "The public starts perceiving any new product 5-6 years after the moment of introduction. In this light, I should say that the MTPL has played an exclusive role in establishment and development of the insurance market and insurance culture in Armenia. The MTPL insurance keeps developing," says Grigoryan.       

As regards the fact that the biggest share of the individuals' complaints sent to the Financial Ombudsman's Office is directed against the insurance companies and mostly concerns MTPL insurance, Grigoryan says that the complaints concern the perception of the MTPL mechanism by both the insurers and the insurees rather than the MTPL insurance system as such. "In other words, what the customers expect to receive meets the insurer's capacities neither legislatively nor in terms of procedures," he says.  

According to the Ranking of Insurance Companies of Armenia by the Agency of Rating Marketing Information (ArmInfo), in 2014 the MTPL insurance premiums amounted to 17.8 bln AMD or 59.2% of the aggregate portfolio of Armenian insurers (up 14.3% versus 2013). The indemnities totaled 9.7 bln AMD (down 0.7% versus 2013). As of late 2014, the number of MTPL insurance contracts was 200,500 versus 181,177 a year before. Read the full story ARMENIA: Demand for motor third party liability insurance not to decline even if it suddenly becomes voluntary
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