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Azerbaijan Insurance Market: Problems and Prospects . Azerbaijan Insurance Forum Chingiz Mekhtiyev. General Information. Establishment: 28 May 1918 Independence: 18 October 1991 Official Language: Azerbaijanian Political system: Presidential
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Azerbaijan Insurance Market:Problems and Prospects Azerbaijan Insurance Forum ChingizMekhtiyev
General Information Establishment: 28 May 1918 Independence: 18 October 1991 Official Language: Azerbaijanian Political system: Presidential Republic Area: 86.6 ths. sq. km. Population: 9 million Capital: Baku Autonomous Republic: Nakhchivan Currency: Manat *
Macroeconomic figures 2010 GDP growth rate 5 % GDP per capita ($) 5,697 Investments ($) 17.3 bln FDI ($) 3.3 bln Inflation 5.7 % Unemployment rate 6% Poverty level 9.1% Average monthly salary ($) 406 Source: Azerbaijan Export and Import Promotion Foundation
Economic Reforms Methodology T h e b i g g e s t j u m p e v e r r e c o r d e d b y D o i n g B u s i n e s s R e p o r t The Doing Business project provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level.
Country ratings • 2010 • Long term credit rating: “BBB-” (Investment grade) • Short term credit rating: “F3” • UNDP Human Development report - 69 WEF Global Competitiveness Report 2010-2011 – 57 among world and 1st among CIS countries
Economy / insurance industry after crisis • Economic growth slowdown • Steep decrease in banking crediting operations(motor, property etc) • Foreign trade operations decreased (cargo insurance) • Big construction projects delayed (construction insurance) • Decrease in establishment of new businesses (entities) • Decrease in investment in economy • Low crude oil prices
Minimum capital requirement (AZN) Before crisis After crisis
2011 (4month) Premiums (mln USD) • 17,44% • 0,5% • 0,95% • 99,5% • 99,05% • 82,56%
Voluntary and Compulsory Insurance • 8,78% growth • 80% • 72% • 81%z • 87,29% growth • 28% • 20% • 19%
Recent year Industry Developments • New law on Insurance (2008) • Increase in capital requirements for Insurers • Adoption of “Compulsory PA and Professional Deceases Insurance” Law (December 2010) • Adoption of law regarding exemption from income tax of Insurers for the purpose of capitalization stimulation for financial sector (2009) • Elimination of restriction for foreign insurance companies in share capital participation of insurance companies (2008) • Adoption of Standard Motor Insurance Conditions for the whole Market (2011) • Adoption of new law on compulsory insurance (which includes compulsory property insurance, passenger insurance, Motor TPL, Property TPL ) (2011)
Perspectives • Development of life insurance • Development of compulsory insurance system • Improvement of insurance culture • Increase in capitalization of insurance companies