Baku, Azerbaijan, June 25
By Anvar Mammadov - Trend:
Capitalization of the insurance sector of Azerbaijan has increased significantly over the past six years, the international ratings agency Fitch told Trend.
The agency noted that the growth affected both the life insurance market and the non-life insurance market.
"At the end of 2017, the capital of life insurance companies increased 3.4 times compared to the figures at the end of 2012 - from 27 million to 91 million manats. The capital of non-life insurance companies has grown by 35 percent over the same period - from 246 million to 332 million manats," Fitch noted.
According to the data provided by Fitch, in 2017, the capitalization of the insurance sector of Azerbaijan decreased slightly. Thus, while in 2016 the total capital of Azerbaijani insurance companies amounted to 486 million manats, last year this figure dropped to 423 million manats.
Fitch experts believe that the growth of capital is primarily hampered by the desire of owners of insurance companies to receive their dividends.
The ratings agency noted that, at the same time, there is a decrease in the return on capital of Azerbaijani insurance companies. In 2017, the return on capital of companies operating in life insurance amounted to 21 percent, while in 2015 this figure was 29 percent.
A similar situation is observed in non-life insurance market. In 2017, the return on capital of non-life insurance companies was 11 percent, which is 16 percentage points lower than in 2015.
There are 21 insurance companies in Azerbaijan, three of which operate in life insurance.