YEREVAN. - The low cost of mandatory auto insurance prevents its development in the territory of former Soviet states, RESO Garantiya Russian Insurance Company President Sergey Sarkisov told journalists on Wednesday, Armenian News-NEWS.am reports. Sarkisov visits Yerevan to participate in the opening ceremony of Armenia-RESO affiliate headquarters.

“In Russia the profitability of MTPL [motor third-party liability] insurance decreases every year, as the inflation increases faster than the tariffs. At the same time, the situation is different abroad. Thus, in Europe average MTPL insurance price is 800 euros, while in Russia it is around $100,” he added.

According to him, this is one of the reasons why RESO Garantiya develops but does not have much profits yet.

“We want to transform the quantity in quality and we are satisfied with the development rates. We will keep working and earning profits,” said Sarkisov.

In 2012, the profits of RESO Garantiya amounted AMD 127.9 ($313 thousand). The company started its activities in 2008.

The MTPL insurance tariffs in Armenia cost around AMD 25,000 - AMD 37,000 ($60-$90) for private vehicles with 80 or less horse powers, and AMD 74,000 - AMD 260,000 ($180-$260) for large minibuses, taxi cabs and rented vehicles.