Azerbaijan should make discounts for selling compulsory insurance policies online - expert
Baku, Azerbaijan, Jan. 11
By Taleh Mursagulov - Trend:
Azerbaijan should introduce discounts for online sale of compulsory insurance policies, Viladi Maniyev, chairman of the board of directors of AzInsurance OJSC, told Trend Jan. 11.
“In order to introduce healthy competition in the market of compulsory third party liability insurance of motor vehicles, it is possible to stimulate online sales of insurance policies when a person would be able to get a discount because that person bought a policy directly from the website or through a mobile application,” he said.
This will also encourage online settlements in general, he said.
Commenting on the possibility of applying Russian experience in the field of pricing for compulsory third party liability insurance of motor vehicles in Azerbaijan, Maniyev expressed doubts about the feasibility of such an approach in the local market.
“Unfortunately, as market practice shows, discounts not provided in the law are often made, and the general trend is that tariffs are lowered,” he noted. “If we don’t regulate tariffs, it is quite possible that they will decline. In Russia, they want to liberalize tariffs in order to boost the markets, but we may have the opposite effect. This may lead to undesirable consequences. The solvency of small companies may fall to such an extent that they won’t be able to make payments in full. They may not resist dumping prices, and this will reduce the credibility of insurance in general.”
The Central Bank of Russia earlier ordered the expansion of upper and lower tariff corridor for compulsory third party liability insurance of motor vehicles by 20 percent.
After the entry into force of the “Law on compulsory types of insurance” in Azerbaijan (in December 2011), the basic cost of the compulsory third party liability insurance policy was 50 manats, and it is applied to vehicles with engine capacity of 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.
For cars with the engine capacity of over 5,000 cubic centimeters, a coefficient 5 is applied.
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