XPRIMM: How would you assess the main trends on the Azerbaijan insurance market in 2014?
Fuad KULIYEV: While total insurance premiums written by the Azerbaijan insurance market in 2014 grew by 6% compared with 2013, non-life insurance premiums were reduced by 8% for the given period. The increase in premiums was due to the tremendous growth of life insurance products. A fall in the non-life insurance market was mainly due to the new legislation on vehicle loans, which negatively impacted on the motor vehicle physical damage insurance. This line saw a 33%-decline in the premium volume. The non-life insurance market was able to balance such business losses by developing compulsory property insurance, compulsory motor third party liability insurance and new credit insurance products.

XPRIMM: How do you appreciate the influence of the local currency devaluation on the re/insurance market?
Fuad KULIYEV: I think the devaluation of local currency will have a short-term negative impact on the volume of business for some insurance products such as bank assurance and long-tail life insurance business. Thus, premiums on life endowment insurance has reduced by 6% and motor physical damage insurance had declined by 7% in the first 4 months of 2015 compare with the same period of 2014. Devaluation didn't have a serious negative impact on other lines, the total market insurance premiums growing by more than 11% during the above period.

The devaluation of the local currency negatively affected the loss ratio on motor insurance. The cost of imported spare parts and vehicle repair have risen on average by 20-25%, which will increase the loss ratio of those companies specializing in long-term motor insurance.

XPRIMM: Are there any changes in rates/tariffs for the previous year? Could you point out also the insurance segments on which rates have changed?
Fuad KULIYEV: There are no specific changes in rates after the devaluation. However, I think some of the market players must review their underwriting policy on motor insurance in order to avoid an increasing combined ratio on motor insurance.

Yet, it is a highly competitive soft market and everything is not always ideal.

XPRIMM: How did the organization of the European Games in 2015 influence the re/insurance market?
Fuad KULIYEV: This year Baku hosted a remarkable event in the sport history of Azerbaijan and the world. Azerbaijan has seriously prepared for the hosting of such an important event and such an organization requires serious investment. Thus, new modern sport facilities have been constructed, infrastructure projects were implemented which are subject to insurance and reinsurance. The organization of the first 2015European Games has contributed to the development of the reinsurance market, starting with the construction phase until its completion.

XPRIMM: What were AzRe's achievements last year? Are there any aspects that you would like to emphasize?
Fuad KULIYEV: AzRe ended the year 2014 successfully. Total equity of the company increased by 17%, exceeding AZN 55 million. Total assets have grown by 22%, exceeding AZN 84 million. We managed to collect AZN 46.5 million in reinsurance premiums in 2014, which is about 20% more than in the previous year. The bottom line of the income statement more than doubled and exceeded AZN 11.9 million.

In line with the quantitative developments, we managed to realize qualitative improvements. In October 2014 A.M. Best assigned a financial strength rating of B+ (Good) and an issuer credit rating of "bbb-" to AzRe Reinsurance. The outlook assigned to both ratings is stable.

XPRIMM: How did the rating assignment influence the company's activity so far?
Fuad KULIYEV: The assignment of ratings had a positive impact on AzRe's reputation on the local market, as it is one of the highest ratings in the economy of the country. Moreover, the rating allows us to underwrite more risks from foreign markets. We have started writing more business from post soviet countries, as well as some countries from the South East Asia, Middle East, and Central/South America. However, our priority is to maintain excellent prudency so that we aim to apply careful underwriting while entering new markets. Our gross capacity for the CIS markets is AZN 25 million for property, engineering and marine-cargo businesses.

XPRIMM: What are the main priorities for AzRe for this year?
Fuad KULIYEV: Our most important business priorities have always been customer satisfaction, strong capitalization and financial stability of the company. We will maximize the service level to our customers from the underwriting to claims settlement, while protecting the increasing capitalization of the company and providing financial stability to both customers and shareholders.