ARMENIA: MTPL market will be fully liberalized on April 1, 2023

29 March 2023 —
From April 1, 2023, MTPL market in Armenia will be completely liberalized, after that government agencies and citizens will have an opportunity to choose insurance companies, considering price/quality.

"As a result, insurance companies will be able to reduce the prices for policies for careful drivers and increase the cost of insurance for those who violate", Tigran Keyan, head of the "Driver's Friend" company, explained to ArmInfo.

According to the expert, insurance companies have developed various modules that will guide them when calculating MTPL costs. "If before many people complained that without any accidents they had to pay for policies as much as the worst violators of traffic rules, now as a result of market liberalization, accident-free driving will entitle them to a discount", Keyan added.

Insurers will consider places of registration of vehicles. The range of tariffs for several insurance companies will depend on the age of vehicles as well. When calculating MTPL tariffs, driving history of vehicle owners (past accidents) will become a decisive factor, which will allow experienced and careful drivers to get additional discounts, and when concluding an agreement online, the policy cost will decrease by an extra 10%.

As Keyan noted, market liberalization should not lead to higher prices. "Development of competition will lead to price flexibility and improve the quality of services provided. The Central Bank and the Bureau of Motor Insurers of Armenia will monitor that the tariffs are reasonable and do not lead to the system breaking", the expert concluded.