Azerbaijan, Baku, Jan. 10 / Trend U.Ismayilova /
Gunay Sigorta Insurance Company Acting Chairman Vugar Rajabov believes the introduction of new compulsory service in the Azerbaijani insurance market for the first time, will increase awareness among the population.
Azerbaijan has approved the law on compulsory insurance on labor ability loss in production and up to March 2011, portfolios will be divided in life and non-life risks in the insurance market of the country. At present, there are two specialized companies for life insurance in Azerbaijan, namely Ateshgah Heyat and Qala Heyat. JSC Pasha Heyat Sigorta is expected to receive a license to start insurance activities in January.
According to the years-long practice, Rajabov said, the compulsory insurance will be actively implemented by local employers and information on timely payments by insurance cases will be distributed to all employees.
"The compulsory insurance services will lead to a 70-80 percent increase of awareness and confidence among the population towards insurance," Rajabov said.
He said today the country's population has the wrong picture about insurance, which has been there since the Soviet times when people paid dues but did not receive insurance benefits.
Regarding the activation of the life insurance in Azerbaijan, Rajabov said the move is yet another incentive for the development of the insurance market, particularly, the life insurance market. The share of life insurance in the overall portfolio of the insurance market in the country at present does not exceed one percent.
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 equaling 45.48 million manat. Total premiums for the year decreased by 8.17 percent or 152.27 million manat in Jan.-Nov, 2009, with payments declining by 2.48 percent or 46.64 million manat.
The official exchange rate is 0.7976 manat to $1 Jan. 10.