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Azerbaijan Insurance Market: Problems and Prospects

Explore the current state of the insurance industry in Azerbaijan post-crisis, including market trends, major players, and recent developments. Learn about the regulatory changes, market outlook, and growth prospects.

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Azerbaijan Insurance Market: Problems and Prospects

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  1. Azerbaijan Insurance Market:Problems and Prospects Azerbaijan Insurance Forum ChingizMekhtiyev

  2. 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 *

  3. 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

  4. 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.

  5. 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

  6. Azerbaijan: Economy Overview

  7. Azerbaijan: Overview

  8. 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

  9. Crisis and Insurance Market of Azerbaijan

  10. Minimum capital requirement (AZN) Before crisis After crisis

  11. Main Market Players

  12. Market Players

  13. Total Assets and Paid-up capital

  14. Insurance Premiums

  15. 2011 (4month) Premiums (mln USD) • 17,44% • 0,5% • 0,95% • 99,5% • 99,05% • 82,56%

  16. Voluntary and Compulsory Insurance • 8,78% growth • 80% • 72% • 81%z • 87,29% growth • 28% • 20% • 19%

  17. Insurance Premium structure, 2010

  18. Premium concentration, 2010

  19. Loss ratio

  20. Reinsurance market (mln USD)

  21. Reinsurance premium, by countries

  22. 2011-2012 market growth forecast

  23. 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)

  24. Perspectives • Development of life insurance • Development of compulsory insurance system • Improvement of insurance culture • Increase in capitalization of insurance companies

  25. THANK YOU !!!

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