Azerbaijan controls over half of S Caucasus insurance market

Azerbaijani insurance market accounts for about 60 per cent of the total assets of all insurance companies active in the South Caucasus countries, 82 per cent of their share capital and 52 per cent of all insurance premiums, Azerbaijan`s only reinsurance company, AzRe, estimates.

In 2011, the assets of insurance companies in Azerbaijan totaled $581.9 million, while those of firms in Georgia - $300.1 million, and Armenia - $81.6 million. Paid-up share capital of all companies operating in the three countries was $321.84 million, $41.9 million and $30.94 million respectively, according to research of the South Caucasus region`s insurance market conducted by AzRe.

Insurance fees in Azerbaijan totaled $270.8 million in 2011, while in Georgia - $191.2 million, in Armenia - $58.08 million, and charges per capita - $29.32, $42.49 and $18.15, respectively.

``Weak aspects of the insurance markets of the South Caucasus are their being young, poor history of the insurance system of the former USSR, a narrow range of services, a lack of modern sale technology and an advanced IT-platform, a low level of corporate governance, sensitivity to prices and a low coverage of insured people,`` the researchers said.

The strong points are great opportunities for growth with well-educated professionals who know at least three languages, extensive infrastructure and energy projects, the adoption of laws on compulsory insurance, tax benefits for life insurance, gradual capitalization and the passage of new regulations, the research found.

28 insurance companies operate in Azerbaijan, 14 in Georgia and eight in Armenia. Three life insurance companies and one reinsurance company operate only in Azerbaijan.

The number of insurance brokerages in Azerbaijan is six and in Georgia - 12, while Armenia has four.

Life insurance

The life insurance market in Azerbaijan may grow by one-third in 2012, Ateshgah Heyat company`s board chairman Akbar Madatli told Trend news agency.

Three companies authorized to provide life insurance in Azerbaijan -- Ateshgah Heyat, Pasha Heyat and Qala Heyat -- collected fees in January-May 2012 for all types of life insurance totaling 20.62 million manats ($26.26 million), or 55.3 per cent over the same period of 2011.

Last year, the insurance premiums amounted to 22.55 million manats ($28.72 million).

``We expect that the market in 2012 will collect premiums amounting to about 30 million manats. This is a good indicator for the market, though compulsory insurance will account for more than half of the charges,`` Madatli said.

He said his company aims to gain a 30 percent share in the domestic market.

In the first five months of 2012 the companies collected 14.12 million manats from compulsory insurance and disability resulting from occupational diseases and accidents at work, 18.26 percent above the same period of 2011.