Tuesday, October 27 2020 15:19

ArmInfo. The total net profit of insurance companies in Armenia for 9 months of 2020 jumped 3.6 times against the same period last year (against 3 times growth a  year earlier), exceeding 4 billion drams ($ 8.2 million).

According to the Financial Rating of Insurance Companies of Armenia, prepared  by ArmInfo IC, the acceleration of growth of this indicator was  observed against the background of the reversal of the dynamics of  insurance premiums and compensations from 18- 26% growth towards  7-17% decline. This is the result of a decline in premiums and  reimbursements of most insurance companies.

It should be borne in mind that the third quarter also fell on the  extended period of the State of Emergency (from March 16 to September  12) due to the coronavirus pandemic, during which many types of  economic activities were temporarily banned in the first two months  and only from May 18 the ban was removed, but so far the activities  of international air, rail, and bus services remained limited, and  the activities of catering facilities and services were partially  resumed.

On a quarterly basis, insurers' net profit turned from a 2.6-fold  growth in Q2 to a 73% decline in Q3, repeating the dynamics of a year  ago - from a 4-fold growth in Q2 to a 34% decline in Q3. This was  observed against the background of the release of premiums and  reimbursements from 48-24% decline to 13-29% growth in the III  quarter. As a comparison, we note that in the third quarter of 2019,  the dynamics of premiums also showed improvement - with the exit from  the 42% decline to 4% growth, and the refunds maintained an upward  trend with a sharp acceleration of rates from 0.3% to 46.4% .

The first place in terms of net profit for 9 months of 2020 was taken  by IC "Nairi Insurance" - 1.18 billion drams (an annual growth of 2.7  times). INGO Armenia IC took the second position with a net profit of  1.15 billion drams (an annual growth of 3.5 times). The third place  was taken by "Armenia Insurance" IC with a net profit of 1.1 billion  drams (an annual growth of 6 times). The fourth place is occupied by  Rosgosstrakh Armenia IC with a profit of 297.2 million drams (an  annual growth of 7.5 times, with an exit from the loss).  IC RESO  took the fifth position with a net profit of AMD 209.7 million (20.7%  annual growth). And the list of ICs is closed by the level of net  profit of IC "Seal Insurance" - 52.8 mln AMD (growth by 27.1% y / y).

The decline in premiums and indemnities slowed down the growth of  profits on the insurance line for 9 months of 2020 to 7.3% per annum  - to 15.5 billion drams, against the growth of 9.8% a year earlier.   Moreover, in a quarterly context, this indicator lingered in a  decline with a slowdown in the third quarter to 10.7% from 64.6% in  the second quarter, while a year earlier there was an acceleration of  the decline from 67.3% in the second quarter to 73. 2% in the third  quarter. Insurance profit for 9 months of 2020 was the leading one  for IC "INGO Armenia" - AMD 4.3 billion (reversal of annual dynamics  from 68.8% growth to 24.4% decline), in second place - IC  "Rosgosstrakh Armenia" - 4.05 billion drams (reversal of the annual  dynamics from 46.7% decline to growth by 2.1 times), and the third  position was held by IC "Nairi Insurance" - 2.999 billion drams  (reversal of the annual trend from 26.9% decline to 48.1% growth).  The fourth position of IC "Armenia Insurance" - 1.5 billion drams  (with a slowdown in annual growth from 46.2% to 12.9%). The fifth and  sixth positions in this indicator are occupied by Seal Insurance and  RESO IC - 1.4 billion and 1.2 billion AMD, respectively (with a  reversal of the annual dynamics from 27.5-61% growth to 14.1-30.6% th  recession).

It should be noted that there are 6 companies operating in the  insurance market of Armenia, which out of the available 20 classes of  insurance operate in 17, except for insurance of railway transport  and liability from its use, insurance of judicial and extrajudicial  expenses. Since the second quarter of 2020, the insurance class for  agricultural risks has been added to the UK reports, but it is not  added to the final indicator, since it is taken into account in two  other types of insurance: property against fires and natural  disasters; property from other damages. IC "INGO Armenia" - 16 and IC  "Rosgosstrakh Armenia" - 15 are licensed by the largest number of  classes (the estimated exchange rate of the dram to the dollar as of  30.09.20 was 488.41 AMD / $ 1).