Ranking of Azerbaijani insurers in terms of unprofitability

Baku, Azerbaijan, Feb.1 / Trend A.Akhundov /

Figures from the State Insurance Supervision Service under the Azerbaijani Finance Ministry, show that the insurer with the largest number of payments relative to premiums is Fidan Sigorta.

The company's share of payment charges was 75.16 percent, the highest figure in the market. The reason is primarily the fact that in August its licence was suspended for half a year, meaning that at present the company has no right to sign new contracts and may only serve current customers.

However, in quantitative terms the amount of indemnity remains low at 206,400 manat, or 0.33 per cent of the whole market.

A high share of payments relative to the charges (65.87 per cent) is also observed for the A-Qroup insurance company which is one of the market leaders in terms of insurance indemnity. With payments of 5.34 million manat, the company ranked fifth among 28 Azerbaijani insurers in 2011. Over 80 per cent of A-Qroup's charges are secured through voluntary medical insurance, which is the most unprofitable type in the voluntary segment of the Azerbaijan insurance market.

The share of indemnity in charges carried out by companies of this type in 2011 is 67.83 percent. In terms of unprofitability, the voluntary medical insurance was second only to the compulsory insurance of civil servants - 79.72 per cent in 2011.

Life insurance companies Pasha Heyat (2.2 per cent), Ateshgah Heyat (1.78) and Qala Heyat (0.91) have the lowest ratio of payments to charges. Compulsory education of workers and voluntary life insurance are the lowest in terms of unprofitability in Azerbaijan - 1.54 and 4.86 per cent respectively.

"Such low level of payments relative to charges is related to the specificity of these types and to the fact that these three types are very young," Niyaz Ismayilov, Deputy Chairman of Pasha Heyat, told Trend on Tuesday.

"When the life insurance market in Azerbaijan was only emerging, a similar situation was observed in non-life insurance. Time is needed for this," Ismayilov said.

The share of payments for insurance companies in 2011 amounted to 28.9 per cent against 34.6 per cent in 2010.

The total volume of premiums for all companies amounted to 212.98 million manat in 2011 (36.89 percent growth), and payments amounted to 61.57 million manat (14.38 percent growth).

The official exchange rate is 0.7863 AZN to $1 on Feb.1