Baku, Azerbaijan, Sept.10
By Zulfiyya Kurbanova - Trend:
Negotiations of The Bashak İnam Sigorta Azerbaijani-Turkish insurance company with local banks on a joint project in the field of agricultural insurance have been unsuccessful, the Chairman of the Bashak İnam Sigorta Board Orhan Hasanov told Trend Sept.10.
"We have been working on this project for a long time, but we have not been able to reach an agreement with the banks yet. Though our initiative received support from the banks, in reality we weren't even able to launch pilot projects at certain banks. Perhaps the reason for such a cautious attitude of banks is in the amount of the insurance premium. If the premium is 1 percent in the case of consumer credit, then this figure will be at the level of 5 percent on the insurance of agricultural credits. We can not reduce the rate of insurance premium because of the risks in this area, which is also not consistent with international practice," he said, expressing the hope that there will be some changes in the process by the end of October this year.
At the moment Bashak İnam Sigorta has no agricultural insurance portfolio, although it planned to sign its first contract in June of this year.
The company is trying to strike agreements on its own and cover the risks in agriculture without state interference.
It is known that every year the state budget provides a program to cover 50 percent of the cost of the insurance contract with the farmers, but, unfortunately, it is almost never used 100 percent.
Despite the fact that agriculture is one of the most important areas of non-oil sector of Azerbaijan, the process of preparation for the wider application of this type of insurance in the country is very slow, Hasanov said.
He added that Bashak İnam Sigorta is ready to resume activities in the field of agriculture insurance.
"Naturally, we need a certain know-how, and the International Finance Corporation (IFC) and the World Bank (WB) offer their help in it. We do not refuse the support, but somehow the solution of this problem is also very slow," he said.
Bashak-İnam Sigorta Shirketi collected premiums worth 1.98 million AZN, and made payments worth 819,000 AZN in January-July.
Bashak-Inam Sigorta Shirketi has been operating in the insurance market of the country since 1996. Some 19.95 percent of its shares are owned by Zamin Bank, 48 percent account for individuals, 17 percent are owned by Groupama Sigorta A.S. (a Turkish subsidiary of Groupama, one of the largest insurance companies in Europe), 8.5 percent by Turanbank, 6 percent by AzerTurkBank and less than 1 percent accounts for the Agrarkredit non-bank credit organisation.