Transcript CESD_Insurance_Secto.. - Center for Economic and Social

Center for Economic and Social Development (CESD),
supported by
Open Society Institute-Assistance Foundation(OSIAF),
Presented on July, 20th , 2011, Azerbaijan
 The
share of the insurance sector in GDP is 0,4
percent, and insurance premiums per capita
constitute 18-19 AZN In Azerbaijan
 The average figure of the insurance premiums in
the world exceeds 15 times the level of the
premiums in Azerbaijan
 Non-life insurance leading in the amount
of insurance products is a unique feature of the
insurance sector
 The share of life insurance in general insurance
contracts is no more than 5 percent
 Life
insurance contracts generally have short-term
liabilities
 Contractors do not quite understand their rights and
responsibilities listed in the contract
 There are discrepancies in the structure as well as
quality of the investment tools in the local market
 Insurance rates are low compared not just to developed
countries, but even neighboring countries
 Despite
the numerous laws, legislative database in the
insurance sector of Azerbaijan is not in the average
level of development
 Serious gaps in the law “On Insurance” had also impact
on slow development of the insurance sector in
comparison with other sectors
 There
are 28 insurance companies, a reinsurance
company, five broker companies ( four with the foreign
capital) in the country
 Development level of this sector falls 25-30 times
behind in comparison with that of in foreign countries
 The companies with 1-2 million AZN total capital
cannot conduct a professional insurance business with
AXA, AIG, Groupama and other companies
 Most insurance companies depend on banks in terms of
capital

In the country, insurance is generally divided into two fields:
Life and non-life insurance fields
In the country beneficiaries of health insurance products are not
individuals but companies
 Unlike some western countries (i.e. Germany) health services are
not fully carried out
 Compulsory medical insurance system doesn’t cover insurance
of some social diseases
 One of the leading insurance types of the market is car insurance
 For voluntary insurance, Azerbaijan falls behind even other postSoviet countries

 In Azerbaijan
only 20 percent of the total volume
of insurance collections fall on the share of compulsory
insurance types
 Issues on compulsory health insurance reimbursement
for the unemployed haven’t been clearly indentified yet
 After the law “ On Compulsory types of insurance”
goes into effect, totally new trends are expected in the
insurance market
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Service package of insurance companies includes about 40 insurance
types
Insurance services offered in Azerbaijan are fewer in number in
comparison with the developed countries
Establishing specialized life insurance companies has not developed
the sector
In 2003-2008, 240 percent increase has been observed in the amount
of total capital of insurers
Over the last three years insurance fees and payments on the
domestic annuity insurance, ability to work insurance, and insurance
for incurable diseases have been 0, 00 AZN
In 2008, the insurance companies' total revenues to GDP ratio
has not even reached1percent
In the first two months of 2011, out of 27 companies 25 have made
payments
 There
is a discrepancy between the level of
development of the insurance market and reforms in the
country as well as accelerated dynamics of economic
development
 The Ministry of Finance shows legislative initiatives in
introduction of application of compulsory insurance
types
 Azerbaijan’s
insurance sector has developed not only
less than that of in Russia and Turkey, but even Georgia
 68% of GDP of CIS countries and approximately 90%
of premiums collected in the region belongs to Russia
 In comparison with other types of insurance, medical
insurance in Georgia is developing more dynamically
 Foreign capital has a large share in the insurance sector
in Turkey
 Not
establishing National Reinsurance Company
creates difficulties in establishing reinsurance in
accordance with modern standards
 There is no necessary legal database for development
of life insurance
 Companies do not have opportunities to direct their free
resources to purchase shares and securities
 Application of health insurance hasn’t been realized
 Foreign companies are not allowed in the market
 Extension
of the application of health insurance
 Development of life insurance
 Application of WTO standards/criteria
 Restoration of ‘insurance culture’ of people
 Use experience of Russian insurance companies
 Serious reforms in the health sector
 Changes in legislative acts
Thank you for your attention!
Vugar Bayramov
Leyla Aliyeva
www.cesd.az