Azernews.Az

BAKU – Azerbaijani lawmakers pointed to challenges in the domestic insurance market at a parliamentary committee sitting on Friday.

Chairman of the Milli Majlis committee on economic policy, Ziyad Samadzada, said that though much work has been done in recent years to develop the insurance market, the licenses of uncompetitive companies have been cancelled and a new law on the insurance market passed in 2007, the insurance sector is lagging behind the overall rampant development of the Azerbaijani economy. The country’s insurance market accounts for only 0.4 percent of the Gross Domestic Product (GDP), and per capita insurance benefits make up only 16 manats ($20). A number of complaints have been made over the operation of insurance companies as well, Samadzada said.

Deputy Finance Minister Azer Bayramov said the volume of Azerbaijan's insurance market lags behind not only those of developed countries but also the markets of Eastern European and a number of CIS states.

"The government is trying to boost citizens’ confidence in insurance to rectify the situation. For this purpose, work is underway to improve insurance legislation," Bayramov said.

MP Vahid Ahmadov said that the insurance market is essentially non-existent in Azerbaijan, and citizens take very little interest in it. Ahmadov believes that the law adopted in 2007 has not yielded any fruit either. He suggested that the reasons of people’s lack of confidence in insurance companies be studied.

"Insurance companies should primarily work to fix this situation. These companies should closely communicate with the public, improve their image and avoid problems with insurance payouts," Ahmadov said.

According to him, car insurance payouts currently make up no more than 20-30 percent of the damage inflicted in accidents, adding that the figure should amount to at least 80 percent.