ARMENIAN INSURERS AND MEGA-REGULATOR COME TO CONSENSUS ON COMPULSORY THIRD PARTY AUTO LIABILITY INSURANCE
ArmInfo
2009-05-12 20:40:00
ArmInfo. The day when compulsory third party auto liability insurance
will be introduced in Armenia is not far off and it will be a
good financial and social solution, the member of the Board of the
Central Bank of Armenia Grigor Konjeyan said during the debates on
Armenia’s readiness to introduce compulsory third party auto liability
insurance organized at Armenia Marriott Hotel by AmRating (Armenian
representative of Global Rating), USAID FSDP and ArmInfo News Agency.
Konjeyan is sure that compulsory insurance will, first, be
rejected by people as an additional tax burden. Nevertheless, he
believes that socially-oriented risks must be subject to compulsory
insurance. According to the preliminary estimates of the Central Bank,
compulsory third party auto liability insurance will yield almost
10bln AMD in annual premiums, will boost financial flows and will
raise Armenia’s insurance market to a new qualitative level.
USAID FSDP insurance expert Ara Karyan said that, according to the
World Bank’s forecast, the global crisis will put as many as 172,000
Armenians below the poverty line. As a result, the poverty index in
Armenia will grow to 27%.
"Insurance is a solution to social insecurity. Hence, the introduction
of compulsory insurance products in Armenia in the face of crisis and
declining welfare will help to solve social problems and to develop
the insurance market," Karyan said.
Representative of Sil Insurance company Andranik Ohanjanyan believes
that before introducing compulsory third party auto liability
insurance it is necessary to carry out explanatory work among the
population. "We have conducted no polls to show us what our people
think about insurance, in general, and compulsory third party auto
liability insurance, in particular.
One more big problem is the lack of real statistics on road
accidents. That is, we know how much money compulsory third party
auto liability insurance will give us in premiums but we don’t know
how many insurable events we have and how much money we will have
to pay as insurance coverage. This is a serious problem for local
insurance companies."
"Are insurance companies ready for the introduction of compulsory
third party auto liability insurance?" that’s how President of the
Association of Insurance Participants of Armenia Levon Mamikonyan
started his speech. His personal opinion is that they are not.
"Today, there are an average of 300,000 cars in Armenia. Are we
ready to insure so many vehicles having no professional insurance
experts and appraisers and still needing to regulate the work of our
insurance bureau and to revise our insurance laws? We also have to
improve our system of risk recording and insurance coverage and here
we need international experience."
Director of Prime Insurance Brokers Artavazd Yakhshibekyan said:
"I am sure that our companies are ready to undertake the risks of
compulsory third party auto liability insurance but can we be sure
that the risks will be assessed correctly and impartially and that
the companies will not lose because of poor infrastructure?"
The debaters showed unanimity that Armenia needs compulsory insurance
products, first of all, for solving its social problems. For
this purpose, it is necessary to create favorable conditions for
insurance companies, particularly, by providing them with necessary
infrastructures and qualified insurance personnel (experts and
actuaries).