Azernews.Az

By Aynur Jafarova

Azerbaijan's Finance Ministry along with the Association of Insurers (ACA) will develop a concept of development of insurance in Azerbaijan that will run until 2020.

The news was announced by Head of the ACA Orkhan Bayramov on June 13.

"The concept will cover all main directions of development of insurance market in the country," he told journalists.

"Currently, the project is being discussed with the insurance companies, and the final version will be presented with recommendations included," Bayramov noted.

He added the concept will allow revealing all the needs of insurers. It is possible that each insurance company in Azerbaijan will form its own development strategy after the adoption of this concept.

The formation process of a real insurance market began in Azerbaijan about 10-15 years ago. Currently, this process has not yet reached a level at which each company could prepare its strategy for the next 4-5 years. The stability of the insurance market is an essential part of preparing a strategy for the coming years.

"The UK insurance market would serve as an example, which showed stability even during the crisis period. The participants of the insurance market of this country prepared a development strategy for the next 3-10 years," Bayramov stressed.

He also did not rule out the possibility of consolidation in Azerbaijan's insurance market and said several companies are already ready for such a step.

Touching on the greatest growth in Azerbaijan's insurance market, Bayramov said currently, this is observed in the country's life insurance market, which stood at 52 percent in five months of this year.

The main advantage of life insurance is that even if an insured incident occurs, the funds and investment interests are always paid to the insurer.

The official exchange rate was 0.7843 AZN/USD on June 13.

Earlier the Head of State Insurance Supervision Service under the Finance Ministry Namig Khalilov said the forecast for growth of Azerbaijan's insurance market for 2014 may be revised.

Earlier it was expected that the market growth for 2014 will stand at about 15-20 percent.

The number of policies on compulsory automobile liability insurance has declined by 16.9 percent, and the volume of fees of this type decreased by 18.9 percent compared to April 2013.

The average size of the insurance premium on compulsory automobile liability insurance in Azerbaijan amounted to 71.3 Manats in April. During this month, the insurance companies concluded 94,952 insurance contracts on compulsory automobile liability insurance, and collected premiums totaling more than 6.7 million manats.

Some 28 insurance companies are working in Azerbaijan.

Currently, the share of foreign capital in the Azerbaijani insurance market does not exceed 10 percent, and the limit for participation of foreign capital in the local insurance market is set at 30 percent.

AIG Insurance (now Chartis), AXA, Miracle Insurance and Financial Group, Basak, Glencarron Group Limited are the largest international players in Azerbaijan's insurance market.

Also, Slovenian Sava Re reinsurance company, German Munich Re insurance company, Russian ROSGOSTRAKH, ROSNO companies have shown great interest to Azerbaijan's insurance market.