BAKU, Azerbaijan, Feb. 24
By Yusif Aghayev – Trend:
The further development of insurance sector in Azerbaijan greatly depends on the policy of the Azerbaijani Central Bank, Chairman of the board of the Azerbaijan Insurers Association Azer Aliyev told reporters, Trend reports.
While speaking about the possibilities of positive changes in the country's insurance market in the future, the chairman stressed that the insurance market regulator was changed in Azerbaijan in late 2019.
The Financial Market Supervisory Authority of Azerbaijan (FIMSA) was abolished on November 28, 2019. In accordance with the president’s decree on improving the management of the system of regulation and control of the financial services market. Its powers to supervise the financial markets, stipulated by the Azerbaijani laws, including its rights and obligations in the field of licensing, regulation and supervision in the financial services market, protection of the rights of investors and consumers of financial services, were transferred to the Central Bank of Azerbaijan.
Presently, great expectations are associated with the policy and strategy of the Central Bank in the field of regulation of the insurance services market.
“The framework regulating the relations in the sphere should be thoroughly reformed,” Aliyev added. “Many legislative acts adopted previously are outdated and do not correspond to the realities existing in the market. They should be updated by adapting to the ongoing situation in the insurance sphere. In this regard, the market regulator plays an important role.”
“First, it is necessary to fully assess the entire insurance market of the country by using the experience of the World Bank in this sphere,” Chairman of the Central Bank of Azerbaijan Elman Rustamov said at the press conference earlier. “Implementation is scheduled for this year. A lot of work is to be carried out in the enlightenment in the field of insurance.”
According to Aliyev, in this sphere, first of all, it is necessary to increase public confidence in insurance. “For this, it is important to strengthen work in the field of control in the field of corporate governance of professional participants in the insurance market,” he added.
“Important steps will have to be taken in this sphere; the entire insurance system of the country is inadequate as a result of gaps and shortcomings in this sphere,” Aliyev said. “This often leads to great shortage, violations of financial statements, sometimes to the bankruptcy of insurance companies and, of course, to a decrease in the customer service level, which undermines confidence in insurance in general.”
While speaking about the insurance companies operating in the country, Aliyev said that in general, almost all insurers have automated the work processes, insurance certificates are registered on IT platforms, contracts for some types of voluntary insurance are concluded online.
“A lot of work has already been done in this sphere, but much still should be done,” Aliyev said.
The Azerbaijan Insurers Association was established in 2006 as a voluntary association of professional participants in the insurance services market. Today, the association includes 20 insurance companies, one reinsurance company and five insurance agencies.
Azer Aliyev was appointed chairman of board of the association on January 21, 2019. Presently, Aliyev is the chairman of board of Ateshgah Insurance company.
Azerbaijan’s insurance companies collected insurance premiums in the amount of 681.1 million manat ($400.6 million) in 2019, which is 46.7 million manat ($27.4 million), or 6.4 percent less compared to 2018.
In general, the Azerbaijani insurance companies paid insurance indemnities worth 301.5 million manat ($177.3 million) in 2019, which is 61.2 million manat ($36 million) or 25.4 percent more than in 2018.
Currently, 22 insurance companies and one reinsurance company operate in Azerbaijan.
(1 USD = 1.7 AZN on Feb. 24)