Expert: Azerbaijani insurance market is attractive by its lack of development and relative cheapness
Azerbaijan, Baku, June 12 / Trend A. Akhundov /
Foreign insurers appreciate the investment attractiveness of the insurance sector in Azerbaijan. It was stressed at the International Insurance Conference in Istanbul.
The executive director of the Azerbaijani Association of Insurers Azer Aliyev said that the Azerbaijani insurance market is attractive for foreign investors, because it is not developed today.
"But this market has huge potential due to certain natural resources, promoting sustainable economic development, nine million people, having a tendency to increase, as well as to its geographical location," he said.
He said that the Azerbaijani market is also attractive to foreign insurers by its price.
"It will be rather cheap for global players in the insurance industry to join our market at this stage," he said. "The cost of the insurance companies, as well as the required investment for their development will be much lower than in developed markets. But there will be much more effect."
New large international companies are expected to increase their interest in joining the insurance market of Azerbaijan for the next 2-3 years, Namig Khalilov, the head of the Finance Ministry's State Insurance Supervision Service said earlier.
"There was great interest in the Azerbaijani insurance market before 2008," he said. "Some companies held preliminary talks on this occasion. However, many large companies, showing the real interest, faced some problems in connection with global financial crisis that forced them to postpone investment plans for the future.
He added that the cancellation of the limit of foreign capital in Azerbaijani insurance companies in accordance with the Law "Insurance Activity", operating since March 2008, has increased the investment attractiveness of the Azerbaijani insurance market.
"The bright confirmation of this is that French AXA joined the Azerbaijani insurance market last year," he said. "I'm convinced that other foreign insurers are also expected to show their interest in Azerbaijan in the coming years."
He added that the leading international insurers' joining the Azerbaijani insurance market will y contribute positively to the market's development. The most important thing is that these companies bring their experience, accumulated over decades of work in dozens of countries worldwide, to Azerbaijan.
At present, there are 28 insurance companies (including five with foreign capital), a reinsurance company, six brokerage companies (including five with foreign capital).
In the first quarter of 2011, premiums and payments of the insurance companies, operating in Azerbaijan, were 49.129 million manat (up 9.9 percent from the same period of 2010) and 12.975 million manat (up 26 percent).