Azerbaijan, Baku, Oct. 26 / Trend A.Akhundov /
A growth trend will be observed in the Azerbaijani insurance market in 2011, Chairman of the Board of the International Insurance Company (IIC) Feyruz Novruzov said.
"Today the market meets the dictates of the time. There is still a painful topic of crisis, which was the key factor decreasing the Azerbaijani market compared to 2009, and in particular, compared to 2008. Indeed, the figures of 2010 will be lower than the figures of the two previous years. The market has drooped by about 10 percent since early 2010 compared to 2009. At a time, this was observed all over the world, and Azerbaijan faces this now and there's no getting away," Novruzov said.
He said 2011 should be a turning point, because both banks and large corporate customers gradually emerge from the crisis. Although corporate customers reduced their expenses on insurance in 2009-2010, IIC expects the return of better times and predicts growth in 2011-2012.
"What is the most unpleasant for the insurers now is that the premiums are falling, while payments remained virtually at the same level. But, there is certain logic here. Before, not all clients were seeking compensation in case of accident in the pre-crisis time on health or car insurance. Customers receiving little damage addressed their problems themselves. Now the crisis has affected everyone, and customers began to seek even the smallest refunding and actually, insurance premiums do not reduce," Novruzov said.
He said the Azerbaijani insurance market can collect 500 million manat per year.
"The entire market collected about 163 million manat, or about $ 200 million, in 2009. According to some projections, the Azerbaijan market might well collect 500 million manat per year, and this is not the limit. Still it is not quite lot for 27 companies. There is a potential and it is very big," Novruzov said.
The main factor hindering the development of the market is the low awareness of the country's population about insurance services, Novruzov said.
"The low awareness of our population, its low involvement in the scope of insurance services hinders the development of the market. In addition, there is a non-confidence factor. The time is needed to regain the trust. It is easier to work with corporate customers. They are better informed and they have much higher insurance culture. The insurance should be promoted by all means to solve this problem," Novruzov said.
He said the Azerbaijani Insurers Association jointly with the State Insurance Supervision Service was preparing projects aimed at raising awareness in the field of insurance.
"Our company tries to inform the public about all the advantages of insurance through the media. In addition, the Azerbaijani Insurers Association jointly with the State Insurance Supervision Service plans to implement projects aimed specifically at informing the public about all the benefits of insurance. This will be implemented through the videos, special TV programs and other activities. All the companies hope that this will bear fruit. This is not a question of one or two years, it needs much more time to make people trust the insurer again. Only in this case we can talk about any serious growth," Novruzov said.
Incompetence of individual companies also the important factor constraining the growth of the insurance market in Azerbaijan, he added.
"Sometimes we hear that some insurance companies delay payments, render poor quality services and even sometimes deny payments under any pretext. This, of course, negatively affects the image of the market and all its members suffer from it. Customers lose trust in all companies and the insurance market as a whole. This is an important factor," Novruzov said.
One of the negative factors is the shortage of professional staff, he added.
"Basically, there are good professionals, but their number is few for 27 companies. By the way, sometimes insurance companies use all possible methods to attract a particular specialist, and, unfortunately, these methods are not always ethical," Novruzov said.
There are 27 insurance and one reinsurance company in Azerbaijan. During the first three quarters of 2010, total insurance fees totaled 117.96 million manat and payments - 35.79 million manat.
The total volume of the premiums fell by 9.38 percent (in January-September 2009- 130.18 million manat) and payments f- by 6.35 percent (38.22 million manat).
The official exchange rate is 0.8010 manat to $1 Oct. 26.
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