What to Happen to Azerbaijani Insurance Market in 2008 – Players of Insurance Markets
Azerbaijan, Baku / Trend corr U. Ismayilova / In 2007, the Azerbaijani insurance market began developing more rapidly compared to previous years. For instance, within the first 9 months of 2007 insurance companies collected premiums in the sum of over AZN 101mln (over $120mln), and their payments exceeded AZN 24mln (over $28mln), while during the entire 2006 the companies collected AZN 88mln ($104mln) of premiums, their payments comprising AZN 43mln ($51mln).
In September, the Azerbaijani Finance Ministry withdrew the insurance licenses from two companies - Qorgud Sigorta and Star Alliance, as their capital was less than their authorized capital, which was in conflict with thelaw. In autumn the Finance Ministry issued licenses enabling insurance activities to Baki Sigorta and Qarant Sigorta. In compliance with the acting legislation, authorized capital of an insurance company must constitute AZN 700,000, and in accordance with new legislation it must make up AZN 1mln.
The Azerbaijani Parliament is presently developing for its second reading the draft law in insurance which was designed on the basis of international standards on insurance control and conduct.
On 3 December, Trend interviewed those involved in the Azerbaijani insurance market and they voiced their expectations on the development of the insurance market in 2008:
The head of the Department for State Insurance Control at the Azerbaijani Finance Ministry Namig Khalilov:
- The law on insurance activities and the law on obligatory insurance are expected to be passed in 2008 which we hope will improve the level of insurance and services and will reduce complaints.
The President of the MBASK insurance company Jamil Malikov:
- The growth rate of the Azerbaijani insurance market will slow down in 2008. This will be caused first of all by the passing of the new law on insurance which will divert heads of companies from expanding and developing and will make them perfect the local management system envisaged in the new law. The second reason for the slump will be the fact that in 2007 many insurance companies signed many agreements on business development both with local and international institutions. They will now have to contemplate how to implement these agreements.
The President of the B& G insurance company Afgan Murtuzayev:
- In 2008 the growth rate of insurance companies will catch up with the growth rate of the Azerbaijani economy, as the insurance is an economic field and it has direct relations with finances. If the economy of the country has enough financial resources, this means that there are funds to put into the insurance field.
The Deputy President of the Azergarant insurance company Shukur Huseynov:
- In 2008 the Azerbaijani insurance market will continue its rapid development as it was in 2007. As in the expenditure part of the public budget for 2008 more funds are intended for the development of the non-oil field that will cause the establishment of new companies in different economic fields which need financing. The second reason for the improvement of quality and development of the insurance market in 2008 will be the new law on insurance which will meet the growth rate of the Azerbaijani economy.