Baku, Azerbaijan, April 4
By Abbas Akhundov - Trend:
The restrictions imposed by the Central Bank of Azerbaijan on issuing of car loans will encourage insurance companies to expand the range of offered products on voluntary vehicle insurance, the chairman of Azerbaijan Insurers Association Orhan Bayramov said.
"Companies were not ready for the loan restriction. This was a kind of shock therapy for the insurance market. As a result, it will force the companies to develop product sales on CASCO not through banks, but directly. The choice of products on the market will become wider," Bayramov told Trend on April 4.
He said the companies will pay more attention to efforts to raise public awareness of the voluntary vehicle insurance. As a result, in his opinion, such a situation will lead to increased competition in the vehicle insurance market.
Bayramov also touching upon implementation of Euro-4 ecological standard of fuel in Azerbaijan said that this will lead to a slight increase in the cost of CASCO in the country.
Loans for new cars are issued under the conditions of a down payment in the volume of from 40 to 50 percent depending on their cost, according to new requirements of CBA.
Only the cars that production date doesn't exceed one year at the time of sale are considered to be new cars. The lending terms for used cars have been more stringent, as the amount of a loan is only 20 percent of the car's cost. This means the down payment on this loan amounts to 80 percent of the purchased car's cost.
Before the escalation of the situation in the market, the conditions for issuing car loans were pretty bland: it was possible to buy a new car with a loan for the period of up to five years with a down payment in the amount of 10-15 percent of its cost. Used cars were offered for credit with a down payment of 30 percent of the cost, nominal rate of 20-25 percent per annum for up to four years.
Royal Sıgorta passed state registration on October 11, 2011. A five-year license for insurance activity was issued to Royal Sıgorta by the State Insurance Supervision Service under the Ministry of Finance on December 28, 2011. Five individuals are founders of this insurance company.
Translated by S.I.
Edited by C.N.