According to the report, "the regulatory and supervisory regime in the Azeri insurance sector is developing, but with limited transparency and effectiveness of enforcement". The agency noted that technical sophistication of the local insurance market, diversity and breadth technical skills are modest and still developing.
"Retail products are mainly simple, whereas commercial coverage is designed with the help of foreign brokers or reinsurers. The penetration of insurance in the economy remains limited", the report said.
In 2019 the Azeri insurance market shrank by 6% to AZN 681 million (~EUR 357 million*). At that, non-life segment contracted by 22% y-o-y, while the life one had modest growth of 7%. There are 18 non-life companies, 3 life insurance companies and 1 reinsurer operating in Azerbaijan. The agency underlined high concentration of the market, "with the largest two insurance groups holding a 64% market share of GWP in 2019". However, total number of market participants has been largely stable for about 11 years since 2009. Fitch Ratings "views the quality of Azerbaijan's insurance regulatory regime, both in prudential and conduct aspects, as improving but immature", the report said.
* 1 EUR = 1.9035 AZN (December 31st, 2019)