Local insurance market to stabilize by mid-2017

28 June 2016 14:20 (UTC+04:00)

By Nigar Abbasova

Insurance market of Azerbaijan will stabilize by late 2016 - mid 2017, Mursal Rustamov, Pasha Life Chairman of the Management Board said.

He emphasized significant growth in the life insurance market which in its turn has influenced earnings portfolio of the insurance company.

“In January-May 2016 our earnings has increased by 20 percent as compared to the same period in 2015,” he said.

He also mentioned that regardless devaluation of the national currency in 2015 and decrease of consumer flow in the banking sector, the company has managed to increase the volume of sales. “Volume of sales in the compulsory types of life insurance has grown by approximately 15 percent. The fact is an obvious example of the growth of interest to the life insurance,” he added.

He also said that the share of the Pasha Life in the insurance market of the country amounts to 45 percent. The company is planning to bring up earnings to $50 million.

Being established in 2011 PASHA Life Insurance provides different classes of life insurance. The company carries out its services as a part of PASHA Holding Group of Companies. Authorized capital of the company in April, 2016 amounted to 40.25 million manats ($26.25 million), while the assets of the company reached the level of 150 million manats ($97 million). The company is a member of the Azerbaijan Insurers Association (AIA).

Currently, 25 insurance and one re-insurance company operate in Azerbaijan. As many as 2 insurance companies Qarant insurance and Era Trans have suspended their operations. The decision about Qarant insurance’s termination of operations was taken by the shareholders of the company while Era-Trans was withdrawn from the market due to certain violations including mismatch between aggregate capital of the company and requirements of the regulator.

Life insurance is considered to be one of the most popular segments in Western Europe and other countries with developed insurance markets.

Life insurance market in Azerbaijan appeared in 2011. Currently 3 insurance companies including PASHA Life, Ateshgah Life and Qala Life have licenses to provide life insurance services.

As much as 16.4 percent of the insurance premiums accounted for life insurance in January 2016. The market grew by 53.1 percent as compared to the same period of 2015.

The volume of insurance payments carried out via 25 insurance companies in the country amounted to 76.3 million manats ($49.8 million) in January 2016, according to Azerbaijan Insurers Association. The volume is 21.3 percent higher than the rate shown in the same period of 2015.

The amount of payments carried out by insurance companies were at the level of approximately 13.4 million manats ($8.7 million), which is 29.4 percent higher as compared to the rates of January 2015.

Official exchange rate of the US dollar and euro to Azerbaijani manat was set at 1.5332 manats and 1.6960 manats, respectively, on June 28.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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