ArmInfo.The Bureau of Auto Insurers of Armenia celebrates its 10th anniversary in September. By that date, the Bureau issued a progress report and presented in figures the achievements on the main indicators. As ArmInfo was told in the press service of the Bu Armenian Motor Insurers' Bureau, the Bureau's long-term plans include membership in the international Green Card system and broad cooperation within the framework of the CIS countries. In the medium term, it is planned to liberalize insurance premiums either with the establishment of maximum and minimum thresholds, or without the need for them.
The formation of a real market for spare parts and a competitive market for auto repair shops is also considered.
According to the Bureau, in 2011-2019, the number of insured vehicles increased 3-fold - up to 602,457 units, and in the H1 of 2020, 541,784 units vehicles were insured. (A decrease by 4.9 thousand in an annualized context, most likely, was due to the coronavirus crisis, Ed. note).
The volume of insurance premiums almost doubled in 2011-2019 - to 24.2 billion drams, and in the H1of 2020 amounted to 10.3 billion drams. But more impressive growth was demonstrated by the volume of insurance claims: in 2011-2019, 2.8-fold - up to 15.5 billion drams (excluding reserves), and taking into account reserves, this figure increased 2.3-fold- up to 16.4 billion drams. In the H1 of 2020, the volume of insurance claims amounted to 7.2 billion drams (excluding reserves) or 6.5 billion drams (including reserves).
At the same time, the average amount of compensation from the maximum 223 392 drams in 2011 decreased to 196 891 drams in 2019, climbing to 215 950 drams in the H1 of 2020. On a y-o-y basis, a sharp increase in this indicator was observed in 2015 and 2018, and the largest decline was in 2012 and 2016, but the minimum level of the average amount of compensation was recorded in 2013 - 194 356 drams.
The number of settled claims for compensation in 2011-2019 increased more than 3-fold- from 25 313 to 78 880, and in the H1 of 2020 there were 33 401. Moreover, the y-o-y increase in their number began to be observed in 2016, due to the reform of insurance procedures towards simplification and greater accessibility using online platforms.
The loss ratio of CMPTL for 2011-2019 increased from 55.1% to 73.9%. At the end of the H1 of 2020, the loss ratio has already reached 59%, taking into account the pandemic, and may increase by the end of the year.
As of June 30, 2020, 449,896 policyholders have a valid CMPTL contract, the classification of which according to the accident-free rate (BMC- bonus-malus coefficient) is as follows: 68% or 306,193 policyholders have been assigned the bonus class, 15% or 66,977 policyholders - the class Malus, and the remaining 17% or 76,726 of policyholders fall under the base class.
Over the 10 years since the introduction of compulsory car insurance in Armenia, many steps have been taken to improve not only this segment, but also the insurance market as a whole. So, since March 2016, a system of registration of insurance claims under the European protocol with a threshold of damage up to 50 thousand drams was introduced in the CMPTL market of Armenia, which was subsequently increased to 100 thousand drams in September of the same year, and another increase to 200 thousand drams from August 2020.
Since September 2016, the minimum and maximum thresholds for y-o-y insurance policies of CMPTL have been established, with a classification by engine power and types of vehicles. At the same time, a classification scale of risk levels according to the bonus-malus system was introduced. In 2017, the transition of CMPTL processes to a single window system and a single platform for the insurance market began under the "Armenian Single Window for Automative - ASWA" project, within the framework of an agreement concluded in 2014 with the French Bureau Veritas Inspection Valuation Assessment and Control.
From that moment on, the gradually introduce was began: a system of direct indemnities - in case of an insured event, the victim receives an indemnity from his insurance company, which later returns its amount by recourse from the insurance company where the car that caused the damage is insured (April 2017); conclusion of insurance policies for CMPTL through a single window platform (October 2017); On-Line sale of policies with a 5% discount (November 2017); purchase of policies through payment terminals with cash-in function (December 2017). In February 2020, another automation of the CMPTL process followed - the registration of insurance claims under the European protocol through the ASWA mobile application. Thus, the CMTPL processes have been transferred to a new level of standards and automation - to a single window system and a single ASWA platform.