Several Azerbaijani insurance companies can leave market in 2010

Business Materials 2 March 2010 21:00 (UTC +04:00)

Azerbaijan, Baku, March 2 / Trend U. Ismailova/

Following the results of 2010, the number of insurance companies operational in Azerbaijan may decrease, thinks Shukur Huseynov, Board Deputy Chairman of insurance company Azergarant.

"Some companies, which find difficulties in staying at the market in connection with a decrease of premiums and of the number of insurers, may leave the market", Huseynov believes.

In his view, companies whose stockholders will not be able to increase their respective capitals in time to keep their positions in the current competition situation also may face the problem of leaving the market.

Huseynov believes that following the results of the 2009 operation, almost all companies could collect 50% to 60% of the 2008 insurance premiums, and that in 2010, the companies will undertake serious measures to keep the 2008 level.

On the while, no serious increase of either the market's portfolio or amount of transactions is expected to occur, according to Huseynov.

In his view, the state of the market can also improve due to establishment of new working positions in Azerbaijan by either foreign or local multinational companies, which are obliged to enjoy insurers' services. Although establishment of such new objects for insurers will serve to strengthening of either fair or unfair competition at the insurance market, it will contribute positively to general growth of the market.

There are 28 insurance companies and 1 reinsurance company operational in Azerbaijan. Following the results of 2009, total premiums of the insurers were equivalent to AZN 163.51 million, with AZN 53.07 million as insurance payments. In the year, the premiums and the payments decreased by 8.7% and increased by 6.5%, respectively.

The official exchange rate, as of March 2, is AZN 0.8034/US$1.