Azernews.Az

Friday March 29 2024

Azerbaijan studying int'l experience in agricultural insurance

21 June 2013 16:07 (UTC+04:00)
Azerbaijan studying int'l experience in agricultural insurance

By Nigar Orujova

Azerbaijan's Finance Ministry is developing a proposal to amend the existing insurance legislation for the development of agricultural insurance in the country, Minister Samir Sharifov told the local press on June 20.

"One cannot say that this type [of insurance] does not work, however, the market is very limited. The population is insufficiently informed about it. On the other hand, the existing mechanisms are not perfect," Sharifov said.

According to Sharifov, the ministry and major insurance companies are studying relevant foreign experience.

"In the near future, we will prepare and submit proposals to the government on the development of this type [of insurance]. The proposals concern amendments and addenda to the legislation so that we can make broader use of this type," he said.

Namig Khalilov, head of the State Insurance Supervision Service under the Finance Ministry, said on June 20 that currently the Service is working on the development of the existing agricultural insurance.

"Improvement of the system is not planned through compulsory insurance, but implies optimizing the existing system of subsidizing a certain part of insurance premiums by the state," Khalilov said.

The international experience in this area is being studied and agricultural insurance based on the principles of partnership between the government and the private sector was selected as the most appropriate model, he said.

"Agricultural insurance is not effective. For such countries as Azerbaijan, which have no agricultural insurance history and statistics, access to reinsurance is difficult and expensive in the first stage, which is the cause of the low [public] interest. In this regard, we are studying the relevant experience of Turkey, which has created a special bureau (Tarsim), and insurers are agents of the state. Companies get a commission of 50 percent of the value of insurance contracts," Khalilov said.

According to Khaliov, the concept "Azerbaijan 2020: A Look into the Future" envisages bringing the insurance market up to 1 billion manats (over $1.27 billion) by 2020.

The total capital of Azerbaijan's insurance market made up 343.44 million manats last year, including paid-up share capital, which amounted to 294.06 million manats, and other capital reserves constituted 49.39 million manats.

There are 28 insurance and one reinsurance company in Azerbaijan.

Loading...
Latest See more