Local insurance market may grow significantly by year end
By Mirsaid Ibrahimzade
Insurance market of Azerbaijan may grow by 10-15 percent by the end of the year.
Khayal Mammadkhanli, Chairman of the Committee of Insurance Intermediaries of the Azerbaijan Insurers Association, an insurance expert, has made the remarks in an interview with Trend.
He said that Azerbaijan's insurance market may reach one billion manats ($588.23 million) in the next two-three years.
Mammadkhanli noted that there are some shortcomings in this sphere since despite the fact that some types of compulsory insurance are defined by law, in practice there is no full application of these types of insurance. This is related, for instance, to compulsory real estate insurance.
“Insurance of apartments, houses, buildings of citizens is mandatory. But most of them are not insured. The development of compulsory real estate insurance can bring an additional minimum of 100 million manats ($58,65 million) to the market in the form of insurance premiums,” the expert pointed out.
Further, Mammadkhanli emphasized prospects of agricultural insurance and said that agriculture is the second most promising market in Azerbaijan after the oil sector; however, the share of agriculture insurance is very small, because many farmers are far from this.
“If you pay attention to this area, then agricultural insurance can help increase the insurance market by 100-150 million manats ($58.65 million - 87.98 million). The introduction of compulsory medical insurance from next year will also facilitate to a serious growth in the market,” he stated.
Mammadkhanli underlined several factors which facilitate to the increase of insurance market.
“After incidents with earthquakes and fires, the state began to pay special attention to the issue of insurance, people began to be educated, supervision mechanisms were tightened - and all of this played its role in the growth of interest in insurance,” the chairman said.
In addition, the expert added that new and interesting comprehensive car insurance products have appeared in the market, which brought additional 3-4 million manats ($1.76 million - 2.35 million) to the market.
Then, he stressed that Azerbaijan's insurance market may be considered one of the most developed in the CIS since it ranks third after Russian and Kazakhstan markets.
At the end chairman of the committee stated that the development of the insurance market depends on the income of the population and noted that the more knowledge people have about insurance market, the more interested they are in insuring themselves or property.
It is noteworthy that according to Financial Market Supervisory Authority of Azerbaijan, insurance companies operating in Azerbaijan collected insurance premiums of 201.2 million manats ($118.35 million) in January-March 2019, which is 4 percent higher than the indicator of the same period last year.
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Mirsaid Ibrahimzade is AzerNews’ staff journalist, follow him on Twitter: @MirsaidIbrahim1
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