Recent increase of minimal benchmark for insurers’ capital to force them to merge

YEREVAN. November 24. /ARKA/. The minimal benchmark raised recently for insurance companies’ authorized capitals is expected to lead to substantial changes on insurance market, Yermonia Vardevanyan, executive director of Alfa-Insurance Company, said Monday in an interview with ARKA News Agency.

The Central Bank of Armenia has raised the lower benchmark of Armenian insurance companies’ authorized capital from present AMD 500 million to 1.5 billion after January 1, 2010.

Vardevanyan thinks this decision will force Armenian insurers to merge.

“I think substantial changes will be seen on the market soon”, she said. “The new demand will take force in early 2010.”

“What for Alfa-Insurance, our company’s capital is up to the set norm, and shareholders are now considering room for enlarging it,” Vardevanyan said.

She said that the company’s financial indicators rose considerably, compared with the previous year.

“Insurance premiums grew five times and losses shrank 90%. I think the company will retain the pace of premium and profit growth this year.”

According to Alfa-Insurance’s financial reports, the company’s authorized capital amounted to AMD 1 billion by late September, as a year earlier, and assets grew 2.2% or by AMD 22.1 million to from AMD 1.008 billion in late 2008 to AMD 1.031 billion in late September.

Twelve insurance companies are functioning in Armenia now.

The country’s insurance market is under the Central Bank of Armenia. -0—

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