State Insurance Supervision Service: Azerbaijani insurance market expects rapid growth in 2012
Azerbaijan, Baku, June 28 / Trend, A. Akhundov /
The State Insurance Supervision Service under the Azerbaijani Finance Ministry believes that the country's insurance market will experience rapid growth in 2012.
"Next year we will witness the rapid development of the insurance market, both voluntary and compulsory, as well growth in the life insurance and non-life insurance markets," the head of the Finance Ministry's State Insurance Supervision Service Namig Khalilov told Trend.
He said the development of compulsory insurance will give additional impetus to the development of voluntary types of insurance, resulting in a continued increase.
"Voluntary insurance is not at a standstill. There is a dynamic here, as there is in compulsory insurance. In the medium and long-term perspective, the share of voluntary insurance will increase. The physical volume of compulsory insurance will grow, but its share in the total portfolio will fall," Khalilov said.
He said that other countries' experience points to such a trend.
"The role of voluntary insurance is increasingly confirming market development and insurance promotion among the public," Khalilov said.
According to the State Insurance Supervision Service, premiums worth 26.933 million manat (a growth during year - 94 percent) were collected on compulsory insurance in January-May 2011, voluntary - 59.519 million manat (a 12.3-percent increase). Today the share of compulsory insurance in the market has reached 31.15 percent, while in late 2010 it was at 20 percent.
Growth is associated with the application of this year's new law "Compulsory Insurance Against Disabilities Resulting from Occupational Diseases and Accidents at Work.".
Furthermore, Azerbaijani parliament adopted the draft law "Compulsory Insurance Types" on Friday.
The new law regulates four types of compulsory insurance: real estate, liability of owners of motor vehicles, passenger insurance, and real estate liability insurance. In general the country provides nine types of compulsory insurance.
Khalilov said that the four new types of compulsory insurance provided by the new law will be more effective than the previous law's five types.
"They will be more effective, because these insurance practices are prepared using international standards which are based on accumulated experience, both positive and negative," Khalilov said.
Khalilov said that growth demonstrated by the Azerbaijani insurance market during the first five months of this year gives reason to believe that a 30-percent market growth may be expected this year.
The total premiums amounted to 86.453 million in the first five months of this year (a 29.2 percent annual increase) and payments during the reporting period have reached 22.195 million manat (19.9-percent increase).
"Given the 30 percent growth within the first five months this year, in comparison with last year, and the growing monthly rate, one can expect a continued growth of 30 percent", Khalilov said.
In January, the annual decline in Azerbaijani insurers' premiums reached 5.18 percent; in January-February the annual growth of the insurance market reached 8.1 percent, 9.9 percent in the first quarter, 23.47 percent in January-April, and peaking at 29.2 percent in January-May.
The official exchange rate is 0.7869 manat to $1 on June 28.