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Will compulsory MTPL tariffs change in Azerbaijan? (Exclusive)

Business Materials 11 May 2018 09:18 (UTC +04:00)

Baku, Azerbaijan, May 11

By Anvar Mammadov - Trend:

Azerbaijan needs to revise the tariffs for compulsory MTPL - motor third party liability insurance, said the Chairman of the Azerbaijan Insurers Association (AIA) Mustafa Abbasbeyli in an interview with Trend.

He said, it is a question of not universal increase of rates, but their differentiation.

"We think it is time to revise the rates for compulsory motor third party liability insurance. At the same time, we propose not just to increase tariffs, but to differentiate them so that tariffs in large cities differ from those in the rest of the country. If the loss ratio is considered, it is much higher in large cities. Russia already uses such a system of differentiation of tariffs, and we propose to use this experience in Azerbaijan," Abbasbeyli said.

Abbasbeyli noted that if it is decided to differentiate MTPL tariffs, the system applied in compulsory insurance of real estate could be used.

"I think the tariffs in Baku should be 20 percent higher. Something similar is used in the tariffs for compulsory insurance of real estate, where the insured property is divided on a territorial basis - real estates located in Baku, located in Ganja, Sumgayit and Nakhchivan, and real estates located in other cities. We propose to raise tariffs by 20 percent in Baku, by 10 percent in Ganja, Sumgayit and Nakhchivan, and to keep them unchanged in other places," he said.

After the entry into force of the law "On compulsory types of insurance" (in December 2011), the basic cost of the MTPL insurance policy was 50 manats, and it is applied to vehicles with engine capacity up to 1,500 cubic centimeters. As the engine capacity increases (from 1,500 to 5,000 cubic centimeters), the coefficients from 1.5 to 5 are applied to the cost.

Thus, if a new system of differentiated tariffs is adopted, the basic cost of the MTPL insurance policy will be 60 manats in Baku, and 55 manats in Ganja, Sumqayit and Nakhchivan. In other regions, the cost of the policy will not change.

Previously, the insurance premium for all passenger cars was 10 manats.

There are 21 insurance companies operating in Azerbaijan.

The official exchange rate for May 10 is 1.7 AZN/USD.

Follow the author on Twitter: @Anvar_Mammadov

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