Head of association: cost of mandatory car insurance policies believed to be raised

11.11.2011 20:24
Head of association: cost of mandatory car insurance policies believed to be raised

YEREVAN, November 11. /ARKA/. The cost of mandatory car insurance policies are believed to be raised, since the number of car accidents has already exceeded even most pessimistic outlooks, Andarnik Ohanjanyan, executive director of Armenia’s Association of Insurance Market Participants, said in an interview with Orakarg newspaper.

“I think that cost of mandatory car insurance policies should be raised, since car accidents have become more frequent than projected,” he said.

He said that calculation of car insurance policy cost had initially been based only on statistical reports of the traffic police, according to which 1.500 car accidents, on average, are recorded every month.

However, he said, their number has precipitously grown.

“Some 1,600 traffic accidents were recorded in January, 3,500 in September and 20,500 in October,” Ohanjanyan said in his interview. He denied allegations that Armenian insurance companies gain super profits.

“Insurance companies face grave problems when sustained losses reach a precarious degree,” he said. “This indicator has reached 65% in Armenia, since market is small here, expenses are large and service is money-consuming.”

For comparison he pointed out that the rate of losses in European countries ranges between 75% and 80%, and in Russia it reached 67% in 2009 triggering withdrawal of 13 Russian insurance companies from the market. The cost of mandatory car insurance in Russia was raised this year.

Mandatory car insurance was instituted in Armenia on January 1, 2011.

Minimum size of insurance payment on the mandatory car insurance contract for personal cars of no more than 80 hp capacity amounts to AMD 25,000, for taxis AMD 37,000, service vehicles AMD 26,000, vehicles of 231 hp AMD 46,000, 66,000 and 48,000.

Maximum size of insurance payment for personal cars of capacity that doesn’t exceed 80 hp is AMD 42,000, taxis AMD 61,000, service vehicles AMD 44,000 and vehicles of 231 hp AMD 71,000, 110,000 and 79,000. ($1 = AMD 383.73). M.V.-0--


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