Baku, Azerbaijan, Dec. 14
By Emin Aliyev - Trend:
The World Bank (WB) will submit its proposals on the project to the companies participating in the catastrophic insurance pool creation in Azerbaijan by late December, head of the Azerbaijan Insurers Association Orhan Bayramov told Trend on Friday.
"WB has expressed interest in the project," he said. "WB representatives propose to mark the country's regions depending on the types of catastrophe risks. For example, the risks of avalanches, of course, are not typical for flatlands. Accordingly, there is no need to insure inhabitants of Absheron district against the risk, which in principle can not threaten them."
The pool participants plan to continue the consultations with WB on this and other issues.
"Moreover, the talks are planned to be held with IFC," he said. "I think that some concrete results will be achieved by the New Year. Our partners will provide us with technical support. We do not need the financial support."
It was earlier reported that the initial portfolio of the pool is planned to hit 600,000-650,000 manats. AzRe (the only reinsurance company in the country) will fully redirect the funds collected in the pool for reinsurance abroad and will charge with the technical issues. According to the international practice, the reinsurers' income hit from 10 to 20 percent of the transferred risks.
At the initial stage, the pool will involve the companies participating in the Compulsory Insurance Bureau as the insurance project against catastrophic risks is associated with the compulsory insurance of real estate.
Compulsory insurance of real estate has been introduced in the country after the new law on 'Compulsory types of insurance'. The companies have started its using since December 16, 2011. The participants of the Compulsory Insurance Bureau established within the law are 12 companies - Pasa Sıgorta, Atesgah Sıgorta Sirketi, Standard Insurance Sıgorta Sirketi, AtaSıgorta, Xalq Sıgorta, AXA MBASK Sıgorta Sirketi, AZSIGORTA, Alfa Sıgorta, Azersıgorta state commercial insurance company, Meqa Sıgorta, İpek Yolu Sıgorta and Azerbaycan Senaye Sıgorta.
Currently, five percent from each collection of compulsory property insurance are intended to cover the risk of unforeseen situations in accordance with the legislation. Natural disasters covered by the compulsory insurance of real estate in Azerbaijan include earthquake, volcanic eruption, storm, hurricane, hail, flood, downpour and landslide.
Around 28 insurance companies and one reinsurance company are operating in Azerbaijan. All of them are members of the Azerbaijan Insurers Association.
The official exchange rate is 0.7844 AZN/USD on Dec. 14.
Translated by NH