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Official: Azerbaijan's insurance market may grow by 20-30 percent in 2011

Business Materials 29 May 2011 14:54
The Azerbaijani insurance market could grow by 20-30 percent in 2001 compared to 2010, Chief of the State Insurance Supervision Service under the Azerbaijani Finance Ministry Namig Khalilov told journalists.
Official: Azerbaijan's insurance market may grow by 20-30 percent in 2011

Azerbaijan, Baku, May 29 / Trend A.Akhundov /

The Azerbaijani insurance market could grow by 20-30 percent in 2001 compared to 2010, Chief of the State Insurance Supervision Service under the Azerbaijani Finance Ministry Namig Khalilov told journalists.

The State Insurance Supervision Service under the Azerbaijani Finance Ministry reported that the total volume of premiums amounted to 155.59 million manat in 2010. The total volume of premiums of all companies operating in the country amounted to 66.342 million manat (23.47-percent increase), and payments amounted to 17.673 million manat (21.71 -percent increase) in January-April 2011.

"Given the introduction of the compulsory insurance in 2011, we expect 20- 30 percent growth in the market," Khalilov said.

Azerbaijani President Ilham Aliyev approved the law on compulsory insurance on labor ability loss in July 2010.

The Azerbaijani parliament discussed the bill on compulsory types of insurance in the third reading. This draft law regulates the four types of compulsory insurance - real estate, liability of owners of motor vehicles, passenger insurance, and liability insurance while exploiting the real estate.

Under the bill, regardless of the housing cost the insurance sum is set at 25,000 manat for Baku, and the release amount at 250 manat. The figures are 20,000 manat and 200 manat, respectively, for Sumgait, Ganja and Nakhchivan and 15,000 manat and 150 manat - for other regions.

The insurance fee for Baku's resident will hit 50 manat a year with insurance rate at 0.2 percent for this type of insurance. One who seeks a higher amount of insurance compensation has the opportunity to buy voluntary property insurance policy that will allow development of this insurance type.

Under the bill, the compulsory insurance of real estate will be distributed to all types of buildings, houses and apartments belonging to individuals, offices, legal entities, public property. In this case the insured event will be considered the facts related to damage to this property as a result of fire, explosion, lightning, short circuit in the electrical system, an accident in the sewer or water system, natural disasters, etc.

Compulsory insurance of civil liability associated with the exploitation of real estate provides insurance protection for third parties from harm caused by using this property. This kind of insurance will apply to legal and physical entities engaged in entrepreneurial activity. The rate of insurance coverage for this type of insurance for damage to health will hit 50,000 manat (per person, 5,000 manat), property - 50,000 manat.

Compulsory insurance for passengers will relate to people using the vehicles, regardless of its form. The amount of the insurance coverage will hit 5,000 manat per person. Until now, this type of insurance is regulated by the law adopted in 2003, but the acting form is unacceptable today and creates problems in obtaining compensation.

The bill provides for a differentiated approach while determining the insurance rate, depending on the vehicle. The rate of insurance coverage on property will amount to 5,000 manat (1,000 manat today) and 50,000 manat (5,000 manat today) for health. This activity is regulated by the law dated 1996.

Twenty seven insurance companies and one reinsurance company operated in Azerbaijan in the report period.

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