center for economic and social development (cesd), supported by open society institute-assistance...
TRANSCRIPT
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 post-
Soviet 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
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 realizedForeign companies are not allowed in the market
Extension of the application of health insuranceDevelopment of life insuranceApplication of WTO standards/criteriaRestoration of ‘insurance culture’ of peopleUse experience of Russian insurance companies Serious reforms in the health sector Changes in legislative acts
Thank you for your attention!
Vugar BayramovLeyla Aliyevawww.cesd.az