Compulsory insurance fees increase by almost 7 percent in Azerbaijan

Business Materials 25 November 2013 11:20 (UTC +04:00)

Baku, Azerbaijan, Nov. 25
By Emin Aliyev -Trend:
Fees for compulsory insurance in Azerbaijan in January- October of 2013 amounted to 114.44 million manat, an increase of 6.52 percent per year, their share in total charges decreased from 38.08 percent to 33.89 percent. Payments for these types rose compared to 2012 by 2.24 times to 30.24 million manat, the Finance Ministry's report on the activities of insurance companies in January-October 2013 said.

The process of using the new law on "Compulsory insurance" started on Dec. 16, 2011. According to it, types of compulsory insurance - real estate insurance, civil liability while exploiting real estate were introduced. The insurance amount on compulsory liability insurance of vehicle owners and passenger insurance were increased.

The 12 companies, all members of the Bureau of Compulsory Insurance, which have the right to engage in such activities, collected 58.88 million manat on the compulsory civil liability insurance of vehicle owners in January-October of 2013, which is less than the figure for the same period of 2012 by 5.79 percent.

In general, the compulsory civil liability insurance of vehicle owners in January-October of 2013 accounted for 51.45 percent of fees for compulsory insurance (58.17 percent in January-October 2012) and 17.44 percent of all premiums collected in the market over this period (22.15 percent in January-October of 2012).

After the law 'On compulsory insurance' came into force in December 2011, the basic cost of an insurance policy on compulsory civil liability insurance of vehicle owners amounted to 50 manats and is used in regard to cars with an engine capacity of up to 1500 cubic centimetres. With the increasing volume of the engine (from 1500 to 5000 cubic centimetres), coefficients from 1.5 to 5 are added up to the cost. Coefficient 5 is used for cars with an engine capacity over 5000 cubic centimetres.
Previously, insurance premium for all passenger cars was 10 manat.
In January-October of 2013, payments at 21.09 million manat were made on compulsory civil liability insurance of vehicle owners or by 4.97 times more than the same period of last year.
From compulsory insurance of immovable property, civil liability in real estate and passenger insurance, companies have collected respectively 11.04 million manat (individual payment for this type were almost 1.25 million manat) and 302.79 manat (without payment).
The compulsory insurance bureau was established in Azerbaijan in accordance with the law on "Compulsory types of insurance". Pasha Sigorta, Ateshgah Sigorta, Standard Insurance, AtaSigorta, AXA MBASK, Xalq Sigorta, Standard Insurance, AzSigorta, Alfa Sigorta, State commercial insurance company 'Azersigorta', Meqa Sigorta, İpek Yolu Sigorta,Azerbaijan Senaye Sigorta are members of the bureau.

In April 2012, the Bureau started paying compensation claims to third parties who suffered insurance incidents.

Affected persons may apply for compensation to the Bureau on compulsory insurance in the following cases:
- If the damage to the health of the person has been caused by unknown motor vehicle;
- If the damage to the health of a third party has been caused through the use of a motor vehicle by a person without agreement on compulsory insurance of civil liability, provided that claims for damages made by the victim have not been satisfied by the culprit causing the road accident.

The three companies that have the right to engage in life insurance sales in Azerbaijan - Pasha Heyat, Ateshgah Heyat and Qala Heyat - on compulsory disability insurance resulting from occupational diseases and accidents in January-October of 2013 collected 22.5 million manat. This is higher than last year by 9.97 percent.

In the structure of compulsory insurance in January-October of 2013, premiums for individual state insurance for servicemen was at 12.69 million manat with payments of 5.78 million manat, the state individual insurance of judicial and law enforcement agencies' employees was at about 8.88 million manat with payments of 814,580 manat.

The total volume of premiums of all companies operating in the country was 337.65 million manat (growth in the year by 19.67 percent), and payments for the reporting period were made at 98.97 million manat (31.16 percent growth).

The Ministry of Finance report has not given the results from the only reinsurance company AzRE.
The official exchange rate on November 25 is 0.7843 AZN / USD.