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Azerbaijan's insurance market not expect serious growth in near future

Business Materials 26 July 2010 19:32 (UTC +04:00)

Azerbaijan, Baku, July 26 /Trend, I.Khalilova/

Serious surge is not expected on the insurance market of Azerbaijan over the next five years, the chairman of the Board of Directors of the Alfa Sigorta Company Khayal Mammadkhanli said.

"If Azerbaijan does not adopt new legislation in the field of insurance, for example, such as insurance against fire, which is very difficult because it is unrealistic to expect any new arrangements in the insurance market of the country over the next two years, the serious growth can not be expected," said Mammadkhanli.

According to him, the government should get rid of the burden of compensation to cover the damage caused by natural disasters, as already it is time to transfer it to insurance companies.

"It needs to somehow stimulate the population or compulsorily require to insure their property, so that in an emergency situation, insurers could cover losses. In international practice, such losses are covered by insurance companies, not state," said Mammadkhanli.
Meanwhile, according to him, some cases on exchange of customers, non-payment of insurance coverages by several companies break everything that has been done so far on the market to gain the trust of the population. The only way to maintain this trust is to make payments on insurance cases, not to violate the rights of clients. Only as a result of fulfilling all of these conditions, it can be possible to expect growth on the insurance market.

He said the insurance market of Azerbaijan in the medium term can grow annually by 5-10 percent under favorable conditions.

"I do not think that the country's insurance market will grow two to three times. It can grow by 5-10 percent per year through the new Law on obligatory insurance of disability resulting from professional diseases and industrial accidents, as well as the improvement of the effectiveness of obligatory insurance. In any case, the market amount is unlikely to exceed 200 million manat in the next two years," Mammadkhanli believes.
Such predictions are linked with the fact that about 3-4 years are required for development of accumulated life insurance in Azerbaijan.
The activities of the Association of Insurers of Azerbaijan (AIA) must also be improved for the development of the insurance market.

In the first half of 2010, the insurance companies collected premiums in amount of 76.88 million manat, which is 3.8 percent more compared with the same period of last year. But the payments for the reported period declined by 8.8 percent to 22.5 million manat.

Official rate on July 26 is 0.8036 AZN/USD.

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