ArmInfo.By December 1, 2023, the loss ratio for Compulsory Motor Third Party Liability (CMTPL) in the insurance market of Armenia, increased to 70% from last year's 65%, according to the data from the Motor Insurers' Bureau of Armenia. An increase in the coefficient began to be noticed in April of this year against the background of the transition to the liberalization of PPP tariffs.
An increase in the loss ratio began to be recorded amid the transition to liberalization of tariffs for CMPTL in April of this year, under which the y-o-y growth in the number of existing contracts slowed down - from 16.8% to 12.8% in Jan-Nov, the growth of insurance premiums sharply slowed down - from 15.6% to 3.4%, and the dynamics reimbursements changed from a 5.1% decline to a 15.7% increase.
According to the Bureau, in Jan-Nov2023, the number of vehicles with CMPTL policy increased modestly - by 9.9% per annum. In quantitative terms, by the beginning of December 2023, there were 659.463 vehicles with CMTPL contracts in the country, however, the number of valid contracts exceeded 1.201 million (with the reduction of terminated ones by1.105 million). The dominance of the number of contracts over the number of vehicles is explained by the large number of quarterly (short-term) contracts. The share of e-policy in the total number of concluded CMPTL contracts did not change during the year: 25%.
Based on the results of 11 months of this year, the volume of insurance premiums collected under valid contracts exceeded 24.3 billion drams ($60.4 million), and the volume of insurance compensation exceeded 16.3 billion drams ($40.6 million). Moreover, the volume of compensation paid in cases of simplified registration of road accidents (Euro protocol) slowed down in decline from 39.8% to 3.7% over the year, amounting to 1.8 billion drams ($4.4 million), and the average size of one payment, on the contrary, changed from an 18.5% decline to an 8.5% increase, amounting to 84.802 thousand drams ($211). For general insurance claims, the average amount of one payment accelerated from 0.9% to 10.1% year-on-year amounting to 233.788 thousand drams ($581).
Since the end of July 2023, there are already 7 insurance companies operating in Armenia, since EFES Insurance Company has returned to the market, which is currently preparing to enter the Compulsory Motor Third Party Liability (CMTPL) segment. (The calculated exchange rate of the dram against the US dollar as of November 30, 2023 was 402.65 AMD/$1).