Country Profile Azerbaijan Insurance market portfolio FY 2012
Voluntary life insurance
4.40%
Compulsory life insurance
6.34%
Accident and diseases (V)
3.02%
Medical insurance (V)
17.47%
Fire and other perils insurance (V)
10.85%
Aircraft insurance (V)
1.76%
Ships insurance (V)
0.28%
Cargo insurance (V)
4.69%
Aircraft liability insurance (V)
0.56%
GTPL (V)
1.10%
Motor Hull (V)
16.56%
Motor Vehicle liability (V)
0.64%
Liability for owners of motor vehicles (M) 21.10% Immovable property (M)
3.33%
Military servants (M) Servants of judicial and
4.60%
law-enforcement bodies (M)
1.69%
Other non-life insurance (V)+(M)
1.59%
(V) - voluntary insurance (M) - Mandatory insurance
The Azerbaijani insurance market ended 2012 with a 60.8% y-o-y growth rate in GWP, to AZN 343 million or EUR 330 million, while payments amounted to AZN 94 million (52% more), according to data presented by the Ministry of Finance of the Republic of Azerbaijan. Despite the market growth in 2012, its potential is far from being fully used. We expect the market growth to include such a segment as mandatory MTPL because the number of cars is continuously growing. Definite prospects also exist on the insurance of property, as well as on goodwill life insurance. We expect the market to expand and deepen this year, declared Namik KHALILOV, Head of State Insurance Supervision Service, Ministry of Finance of Azerbaijan. In 2012, GWP of the life insurers totaled almost EUR 35.4 million or 11% of the total market. As for the previous reporting periods, the basis of the life insurance market consisted of compulsory types of insurance - GWP of EUR 21 million. At the same time, the insurance companies' overall non-life GWP amounted to EUR 295 million, 58% more compared with 2011. The largest share of the segment was represented by civil liability for owners of motor vehicles insurance class (more than 21% of the total market), followed by medical insurance (17.5%), Motor Hull (almost 17%) and fire and other perils insurance (equivalent to 11% of the total market).
Mandatory property insurance is working In 2012, the mandatory property insurance coverage in Azerbaijan reached 15%. The obligation to insure the buildings owned by natural and legal persons, including those owned by the State, was introduced in the legislation a year ago. Until now, this insurance segment reached EUR 11 million in underwritings, declared Orkhan BAYRAMOV, President of the Azerbaijan Insurers Association. This insurance covers a large variety of risks, including catastrophe risks. The insurance premium is EUR 50, and the mandatory insured amount is EUR 25,000.
Source: Ministry of Finance of Republic of Azerbaijan Central Bank of Azerbaijan Republic Azerbaijan currency exchange rate for calculations: 1 EUR = 1.0178 Manat - AZN (December 31st, 2011) 1 EUR = 1.0377 Manat - AZN (December 31st, 2012)
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At the moment, we are collaborating with the insurance companies to create and implement a unique data base, similar to the one for the MTPL segment, which Access www.xprimm.com and download in MS Excel format (in EUR and AZN) the insurance market indicators (GWP, claims, growth rates, portfolio) – and the market ranking
Year V - Issue 1/2013 |8| www.xprimm.com
Namik KHALILOV Head of State Insurance Supervision Service, Ministry of Finance of Azerbaijan
Orkhan BAYRAMOV President of the Azerbaijan Insurers Association will facilitate the coordination between companies and improve the underwriting and claims payment processes, BAYRAMOV explained.
Agricultural insurance to be mandatory Azerbaijan planned to introduce a new type of compulsory insurance. The State Insurance Supervision Service is examining the experience of Russia and Turkey in preparing a bill to introduce the compulsory agricultural insurance, and this could be a separate law and by means of amendments to the existing law on Compulsory types of insurance, explained Orkhan BAYRAMOV, President of the Azerbaijan Insurers Association. Agriculture is a strategically important area of the economy. This law will be directed to insure the risks in the agricultural sector, which may arise as a result of natural disasters, and to recover those losses, said Orkhan BAYRAMOV.
Compulsory health insurance system becomes a reality Implementation of compulsory health insurance in Azerbaijan is planned within the health care reform framework. Like in most of the European countries, in Azerbaijan the application of compulsory health insurance has been accepted as a positive step. Foreign experience in the compulsory health insurance is studied in Azerbaijan by the State Insurance Supervision Service. The main problem while introducing compulsory health insurance is the