Azernews.Az

By Aynur Jafarova

Insurance companies should make more contributions to the development of Azerbaijan's non-oil sector.

The news was announced by Azerbaijan's Finance Minister Samir Sharifov who addressed the 5th Azerbaijan International Insurance Forum in Baku on June 19.

"It is nice to see that the number of the participants is growing," the minister said. "This testifies to the fact that the event becomes an important platform for exchange of views among professional market participants. Azerbaijan's economy increased by 5.8 percent in 2013. This growth was achieved thanks to the achievements of the non-oil sector. I believe that the insurance market should continue to contribute to the development of the country's non-oil economy."

The minister went on to add that the insurance market has increased six-fold in the last eight years and doubled for the last two years by reaching $543 million in 2013.

"The average amount of the insurance premium has also increased from $29 to $59, while net profit of insurers reached $84 million," he said.

Sharifov also noted the Finance Ministry views the toughening the requirements and regulations governing the activity of insurance companies as a necessary and correct action.

"Toughening the requirements decreases the number of companies on the market," the minister said. "This will make it more efficient."

Sharifov went on to add that Azerbaijan's insurance companies can compete with foreign companies in the domestic market.

"Azerbaijan's insurance market is open, and foreign companies can enter the market," he said. "Our insurance companies have already gained enough experience and qualified specialists, and therefore they are able to compete with foreign companies in the domestic market."

The limit for participation of foreign capital in the insurance market of Azerbaijan will be liquidated completely in 2017.

Based on the decision of the Finance Ministry, the relevant additions have been made to the rules of share accounting and determination of maximum limit for the participation of the foreign capital in the volume of authorized capitals of the insurance companies 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.

Under the amendments, the limit will be held at the level of 50 percent until January 1, 2015, and will increase to 70 percent in 2015, to 85 percent in 2016, and to 100 percent in 2017.

Some 28 insurance companies are working in Azerbaijan. 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.

Later, Sharifov told journalists that today improving the quality of insurance services provided in Azerbaijan is one of the most serious issues.

"It is important to work over improving the quality of services provided by insurers to their clients. The companies should justify the premiums collected by them," he added.

The total volume of fees of 28 insurance companies operating in Azerbaijan amounted to 186.9 million manats in January-May 2014, which is 10.8 percent more compared to the same period of last year.

The volume of payments of insurance companies in the first five months of 2014 amounted to 55.2 million manats, which is 13 percent more compared to the same period of last year.

The 5th Azerbaijan International Insurance Forum kicked off in Baku on June 19, brining together representatives of more than 250 local and foreign companies, experts from the UK, Germany, Belgium, France, Germany, Turkey and Russia.

The two-day forum provides a platform for discussing ongoing processes on the insurance market both in Azerbaijan, the region and the world.

The forum will hear reports on a range of issues, including medical insurance, reinsurance, life insurance, automobile insurance, risk management, and natural disaster insurance.