Azerbaijan, Baku / corr Trend U.Ismayilova / The increase of operation expenses of insurance companies following rise in inflation growth in Azerbaijan will not increase the cost of insurance service, Trend reports.
The International Monetary Fond (IMF) predicts real increase of the growth domestic product (GDP) in Azerbaijan nearly by 23.2% in 2008, compared to 29.3% in 2007. According to IMF's forecasts, in 2007 and 2008 inflation will be 17% in Azerbaijan compared to 16.6% in 2008.
"The increase of consumer prices in the country will not influence on the tariffs of insurance products, but affect the invoice expenses, which comprise 20% of company's expense," Jamil Melikov, the Chairman of the Managing Board of the Azerbaijani insurance company MBASK said on 23 October.
According to Melikov, amid the increase of consumer costs, inflation will influence only this 20% and the increase of operation expenses will be insignificant.
The insurance company Gunay Sigirta calculates the cost of insurance product with the consideration of damage statistics, Mehman Aliyev, the Deputy General Director of the company said. He considers the inflation not to influence the service cost of Gunay Sigorta, but the operation expenses of the company.
According to Aliyev, at any case company gets definite dividends from any type of insurance. For instance, an object of insurance costs AZN 10,000 and the company gets 2% of its cost as insurance fee. If its cost increases to AZN 15,000, the company again charges 2%
Shukur Huseynov, the Managing Board of insurance company Azergarant, said that inflation ratio does not influence on tariffs of insurance products, but even if it influenced, insurance companies would not jeopardize increasing the charges."
"The Azerbaijani insurance market is in the process of development. The companies will hardly want to lose clients, who they attracted through huge efforts," Shukurov said.
Approximately 29 insurance companies operate in Azerbaijan, with minimum stock capital of AZN 700,000. Over January to June 2007 the volume of premiums, collected by companies was AZN 70.68mln and claims comprised AZN 16.26mln. In 2006 the insurance premiums amounted to AZN 88.33mln and claims - AZN 43.62mln.