Tuesday April 16 2024

Online system to improve insurance market

15 July 2019 15:22 (UTC+04:00)
Online system to improve insurance market

By Mirsaid Ibrahimzade

Azerbaijan takes serious steps to improve insurance market which includes an online system leading to the significant simplification of the work process for insured persons in case of insured events and shorten the time of working with officials when receiving necessary documents.

In recent years, the insurance market of Azerbaijan has been showing steady growth. Within past two and a half years it has grown by 64 percent.

Azer Aliyev, the chairman of the board of the Azerbaijan Insurers Association (AIA) told Trend on July 15 that work is underway in Azerbaijan to automate the regulation of relations in the insurance market, in particular, this relates to new software.

Aliyev said the new online system for the management of insured events, which the Compulsory Insurance Bureau (CIB) will launch in the coming days.

The online system also contributes to effectiveness the bonus-malus system (BMS).

The term bonus-malus is used for a number of business arrangements which alternately reward (bonus) or penalize (malus). It is used, for example, in the call center and insurance industries.

The fundamental principle of BMS is that the higher the claim frequency of a policyholder, the higher the insurance costs that on average are charged to the policyholder. This principle is also valid in an insurance arrangement consisting of a high maximum deductible, which is common to all policyholders.

He said the integration of the electronic information system CIB with the system of the Ministry of Labor and Social Protection of the Population of Azerbaijan is being operated in electronic format in issuing insurance policies for compulsory insurance against loss of working capacity due to industrial accidents and occupational diseases.

Aliyev noted that Audatex Azerbaijan is the initiator of introduction of a unified insurance damage assessment system in Azerbaijan.

Although agricultural market is the second important market in Azerbaijan, the level of insurance in this sector of economy leaves much to be desired, due to unawareness of farmers.

Therefore, Aliyev emphasized that after approval of the new draft law on the promotion of agricultural insurance in Azerbaijan, there will be an increase in insurance fees in this area.

The draft law on agricultural insurance has been prepared based on peculiarities of Azerbaijan market and after the law enters into force, agricultural insurance will work on the basis of mechanism of cooperation between the state and the private sector, thus it will be implemented through joint insurance system which will be managed via an e-information system.

The law also envisages the subsidization of insurance premiums, one part of which be paid by the farmer and the other by the state

Afterwards, Aliyev noted that the issue of professional knowledge of insurance agents is also important and it is necessary to enhance the qualifications of insurance agents to expand the scope of their activities, providing services for various types of insurance, and not just compulsory.

In conclusion, he pointed out that compulsory property insurance requires revision and correction. So the mechanisms of control and punishment are not defined and to improve efficiency, this type of insurance should be automated.


Mirsaid Ibrahimzade is AzerNews’ staff journalist, follow him on Twitter: @MirsaidIbrahim1

Follow us on Twitter @AzerNewsAz

Latest See more