The Armenian ministry of agriculture together with Ingo-Armenia insurance company will launch a pilot cattle insurance program next year in the southern Vayots Dzor province, agriculture minister Sergo Karapetyan told a news conference today.

According to him, before to launch this program Ingo-Armenia had studied for two years the livestock sector where risks are relatively low compared with for example, crops growing and may extend insurance to other agricultural sectors as well if this one appears to be successful. He said no other insurance company in Armenia agreed to take the risk.

Earlier a deputy governor of the Central Bank, Nerses Yeritsyan, argued that introduction of compulsory insurance of agricultural risks was still economically unjustified. He claimed that only countries which use advanced technologies and clear risk reduction mechanisms apply compulsory insurance of agricultural risks, while the available statistics show that Armenian farmers if insure these risks will have to pay almost as much as they could receive as compensation, which ‘is not rational in terms of cost.”

According to Yeritsyan, some difficulties may arise in Armenia in connection with preventive measures to protect the harvest from natural disasters, because ‘not all are aware of the possible risks and benefits of making additional investment for the protection of their businesses.”

Armenia applies now only one type of compulsory insurance – insurance of vehicles introduced on 1 January 2011.

According to the Central Bank, the assets of 6 Armenian insurance companies as of September 30, 2014 stood at 44.1 billion drams, having increased by 6.3% from the same period of 2013. Their liabilities stood at 27.2 billion drams, a decline of 16.8%, their capital was worth 16.9 billion drams, a growth of 17.2%. In the third quarter they earned over 2.3 billion drams in net profit. This compared with 338 million drams in losses in the same time span of 2013. ($1 – 458.51 drams).

Source - http://arka.am/