Azerbaijani insurance company expects healthy competition in MTPL market
Baku, Azerbaijan, June 28
By Anvar Mammadov - Trend:
Differentiation of tariffs for compulsory insurance of civil liability of car owners (MTPL) can help insurance companies, Chairman of the Board of Azerbaijan Senaye Insurance Company Kamran Babayev said.
"This step will allow companies to understand in which regions it is necessary to increase sales of MTPL," Babayev said in an interview with Trend.
At the same time, he noted that, this step is not enough to improve competition in the market, and at the present time, there is an urgent need for global changes.
"In general, it is necessary to carry out corrective measures in the MTPL market, because it will be difficult to achieve anything significant only by differentiation. It is necessary to change something globally, and I am glad that the Compulsory Insurance Bureau (CIB) together with the Association of Insurers of Azerbaijan (AIA) are working on this," Babayev said.
The chairman of Azerbaijan Senaye Insurance Company noted that first of all it is necessary to strengthen the measures for control over insurance agents.
"In recent years, the number of agents selling MTPL insurance contracts with illegal discounts has increased in the market, especially in the regions. This leads to unhealthy competition, and as a result, just those companies that comply with the letter of the law suffer most. As a result, in recent years, the share of our company in the market of insurance has significantly decreased. Therefore, we are waiting for the improvement of the competition in this market," Babayev said.
After the law "on compulsory types of insurance" came into force (in December 2011), the basic cost of the insurance policy for MTPL amounted to 50 manats and is applied to cars with an engine capacity of up to 1,500 cubic centimeters. As the volume of the engine increases (from 1,500 to 5,000 cubic centimeters), the coefficients ranging from 1.5 to 5 are applied to the cost. For vehicles with engine capacity of more than 5,000 cubic centimeters, the coefficient equaling to 5 is applied.
Thus, in case of adoption of a new system of differentiated tariffs, the basic cost of insurance policy for MTPL will be 60 manats in Baku, and 55 manats in Ganja, Sumgayit and Nakhchivan. The cost of the policy will not change in other regions.
Previously, the insurance premium for all cars was 10 manats.
The total of 21 insurance companies are functioning in Azerbaijan.
The official exchange rate as of June 28 is 1.7 AZN/USD.
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