Change of life insurance share in market not expected in Azerbaijan in 2012
Azerbaijan, Baku, Jan.20 / A.Akhundov /
Change of life insurance share in the Azerbaijani insurance market is not expected in 2012, said Niyaz Ismayilov, deputy chairman of Pasha Heyat, one of three life insurance companies in Azerbaijan.
Apart from Pasha Heyat, Ateshag Heyat and Qala Heyat are also engaged in life insurance in Azerbaijan.
"New types of compulsory insurance started to work in Azerbaijan from late 2011. This will lead to significant increase of the market itself in 2012 that's why change of life insurance share in the market is not expected," Mr Ismayilov told Trend on Thursday.
Life insurance market of Azerbaijan increased by 15.45 times from 1.46 million manat in 2010 to 22.55 million manat in 2011.
Such a significant growth accounts for the start of use of compulsory insurance against disability resulting from occupational diseases and accidents at production.
Azerbaijani life insurance companies collected 18.9 million manat in the first year of work on this type, which amounts to 83.81 per cent of fees in life insurance segment.
Share of life insurance in the Azerbaijani insurance market increased from 0.94 per cent to 10.59 per cent (excluding fees on compulsory insurance at production at 1.71 per cent) amid growth of the market at 37 per cent.
Mr Ismayilov said 2012 will be very interesting for the Azerbaijani life insurance market.
"Last year was a year of acquaintance with the market, since all participants of the market are young companies. Our company has worked only for 11 months and Qala Heyat since Dec, 2010. From this point of view 2012 will be interesting, companies are more prepared, new products will appear, and new companies may enter the market, competitiveness will increase," Mr Ismayilov said.
He said introduction of compulsory life insurance led to formation of serious customer base and opportunity to offer them new products.
"These customers already know what the insurance is that's why it's easier to offer them new products," Mr Ismayilov said.
Introduction of compulsory type became an incentive for development of voluntary types of life insurance. Thus, fees on voluntary insurance increased by 2.5 times to hit 3.65 million manat.
The official exchange rate is 0.7862 AZN to $1 on Jan.20