ANNUAL INCOME OF INSURANCE PREMIUMS IN ARMENIA WITH INTRODUCTION OF OSAGO TO MAKE UP $15 MLN
ArmInfo
2007-10-22 17:43:00
The annual income of insurance premiums in Armenia with introduction
of OSAGO ( mandatory vehicle insurance) will make up about $15 mln (in
reliance on 300,000 motorcars with conventional premium of $50), Deputy
Director of "Sil Insurance" Company Andranik Ohanjanyan told ArmInfo.
He said that "Sil Insurance" has necessary personnel and resources to
create a branch network in Armenia. Moreover, it is scheduled to form
operative groups to work in emergency sites round-the-clock. The
Company has coordinated the actions also with State Traffic
Inspectorate to avoid possible problems. He thinks that other big
participants in this segment, that number some 4-5 companies, will
succeed in overcoming the problems with transfer to OSAGO.
A. Ohanjanyan said that since 2006 RA Central Bank as the megaregulator
of the market has reduced the number of insurance companies almost
twice within 2 incomplete years (from 25 to 9). The withdrawal of
companies that do not "like" to pay for the damage from the market is
likely to be continued, which is, probably, one of the main reasons
of the high loss of motor-vehicle insurance (by CB forecasts 40%
average annual growth of motor-vehicle insurance loss by 2010). The
growth of the insurance loss for the recent years will, appearingly,
continue. A. Ohanjanyan thinks that today’s loss bar does not reveal
the real picture of the existing risks and shows just the share of
indemnities in insurance premiums.
The mentality of Armenian drivers is also important. It concerns
especially those who buy cars in credit and have to insure it,
which implies an application to the State Traffic Inspectorate or
an insurance company in case of accident. Given the aforementioned,
it is untimely to speak of an objective assessment of insurance
loss. It will become possible when all the accidents are registered
at the State Traffic Inspectorate. Indeed, in this case, the loss
indicator will exceed forecasts, A. Ohanjanyan said.
The Armenian Central Bank is studying the possibility of introducing
OSAGO (mandatory vehicle insurance) in the country within 2-3
years. This requires a staged reform of the insurance system. The
CB thinks it necessary for the first stage of reform to clean the
insurance market, introduce standards and risk management mechanisms,
improve management. For the second stage it is necessary to create
a database, form an institution of actuaries and professional
market participants. For the third stage it is necessary to
introduce mandatory insurance. The legislation must be improved
simultaneously. To transfer to the mandatory insurance, Armenian
insurance companies will be required at least 2-3 years of experience
in this segment of the market, additional capital, network of agents
in the country, and relevant equipment.