Armenian insurance companies’ profits expected to double in 2016-2018

25.08.2016 13:26
Armenian insurance companies’ profits expected to double in 2016-2018

YEREVAN, August 25. /ARKA/. Armenia’s insurance companies expect that their profits will be growing throughout three years and will double by late 2018, the Central Bank of Armenia says in its report ‘Possible Developments of Armenia’s Banking Sector in 2016-02018’ based on programs of prospective development of Armenian banks.

According to the report, insurance companies’ ROA and ROE will average 6.0% and 13.0% respectively against 3.3% and 8.6% in 2015.

Armenian insurance sector’s average annual growth of capital is expected to stand at 9.3% in 2016-2018.

It will be mostly insured by the expected increase of undistributed profits.

Ownership capital’s share in the insurance companies’ total capital is believed to shrink to 66.6% by late 2018 from 87% in late 2015, while the share of undistributed profits is expected to grow to 27.6%.

As a result, the companies’ capital adequacy index will rise 23.1 percentage points mainly thanks to the progressive increase of the size of normative capital and reach 192.6% by late 2018.

Assets of Armenia’s insurance companies are predicted to grow 6.3% every year over a period between 2016 and 2018.

Deposits in banks dominated the insurance companies’ assets in 2015 with 35.8%. Securities, including papers on REPO transactions, made up 19.0% of the insurance companies’ assets and the financial means received on insurance and reinsurance 9.0%.

Average annual growth of deposits in banks is projected at 8.5% and their share in the total amount of assets at 37.9%.

Securities are projected to grow 6.0% making up 18.9%of the total assets and financial receipts on insurance and reinsurance are believed to shrink 6.3%, on average, every year with the share of 9.0%.

According to outlooks the report, annual growth of the insurance companies’ liabilities will be recorded at 4.2%.

In late 2018, technical reserves will dominate their liabilities with 77.0% against 71.0% in late 2015.

Armenian insurance companies’ assets totaled AMD 40.2 billion in late June 2016 after growing 3.5% since the beginning of the year and liabilities AMD 22.1 billion showing a2% decline.

Their capital amounted to AMD 18 billion (11% growth).

As many as six insurance companies operate in Armenia now. ($1 – AMD 474.25). -0---

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