Market participant: Half of Azerbaijani insurance companies expected to merge

Business Materials 10 January 2011 14:54 (UTC +04:00)

Azerbaijan, Baku, Jan. 10 / Trend U.Ismayilova /

In the next two to three years, about 50 percent of local insurance companies in Azerbaijan have to combine their businesses, Gunay Sigorta Insurance Company Acting Chairman Vugar Rajabov belives.

"The companies will have to unite because of low revenues and income, as well as the inadequacies of the market," Rajabov said.

He said the country is observing an active economic development and large companies, both local and foreign, which need insurance partners, can receive information about the financial performance of insurers from the State Insurance Service's site.

"The strong companies, of course, will give preference to insurance companies with serious financial indicators and smaller companies will merge their businesses to improve their situation or leave the market," Rajabov added.

There are 27 insurance companies and one reinsurance company in Azerbaijan. Total premiums of all insurance companies amounted to 139.82 million manat in January-November, with payments of 45.48 million manat. Total premiums for the year decreased by 8.17 percent or 152.27 million manat in Jan.-Nov.2009, while payments declined by 2.48 percent or 46.64 million manat.

The state-owned commercial insurance company, AzerSigorta remains leader in terms of insurance rates equaling 22.8 million manat with payments of 9.66 million manat, while smallest amount of premiums were generated by Meqa Sigorta, amounting to 0.29 million manat, with payments of 0.22 million manat. Premiums of eight companies operating in the country's insurance market do not exceed one million manat.

The official exchange rate is 0.7976 manat to $1 Jan. 10.