LIVE: BAKU: "Insurance in Azerbaijan: New perspectives" Conference - Day 2

"Insurance in Azerbaijan: New perspectives" Conference works are continuing today in Baku. The second day of the event is dedicated to the new opportunities for MTPL market in Azerbaijan.

Read here the main statements:

Vladimir STEJSKAL,Head of Analytics, Central and Eastern Europe, Nordic, Greece, Cyprus and Middle East, AON Benfield, Czech Republic
  • A natural catastrophe is a major adverse event resulting from natural processes of the Earth. It can cause loss of life or property damage.
  • The natural catastrophes can be classified as geological (earthquake, volcanic eruption, landslide), hydrologic (flood, tsunami), meteorological, (thunderstorm, hailstorm, tornadoes etc.), wildfire and space disaster (solar flair, asteroids)
  • 2017 was exceptional year in terms of catastrophe activity with overall amount of insured losses of 134 billion USD in comparison to 56 billion in 2016
  • The annual proportion of non-insured losses varies between 60-80%
  • Commercially available cat models appeared on the late 1980s in the USA. The demand for this type of solution significantly increased after the 1992 Hurricane Andrew when the US market saw 11 insolvencies. In 2005, after Hurricane Katrina, only 3 insolvencies took place despite considerably higher financial impact of the event
  • Reinsurance was the first segment of the insurance industry that adopted the catastrophe models. Catastrophe treaties can be hardly structured and placed without the modelling
  • The most common output of the cat modelling is Probability vs Modelled loss
  • The goal of cat modelling is to estimate possible losses while minimizing uncertainties.

Christopher GENILLARD, Managing Director, Genillard & Co, Germany
  • Challenges for agriculture insurers: climate change, remote sonsors and big data for insurance
  • The trend is towards the developments of multi-peril products
  • Internationally, 3 markets account for 2/3 of the global agricultural insurance premium: USA 11,47 billion USD GWP vs China 7.71 billion USD
  • In the EU, Spain is the biggest insurance market with 647 million EUR with a total EU market in excess of 2 billion EUR
  • Farming itself is changing rapidly from traditional small and medium size farmers to industrial enterprises with large-scale farming
  • In order to combat the protection gap with start with a holistic risk analysis, then we create the technical base tools to understand the risks. we then evaluate and model the entire spectrum of natural perils and commercial risks to which crops are exposed, including those stemming from climate change. We then forge a PPP involving national insurance industry and other relevant and Governmental stakeholders in order to design a complete risk profile and a model
  • Agriculture is very important for Azerbaijan with 55% of the total area being suitable for this purpose.
  • Today, most farmers in Azerbaijan have no crop insurance and therefore no access to credit. A compulsory pubic-private solution makes absolute sense. A state programme and Law is underway to remedy this situation through creation of an agriculture insurance pool in 2019

Firdovsi AGHASHIRINOV, Senior Specialist, Financial Markets Supervisory Authority, Azerbaijan
  • There are 2 strategical roadmaps that we follow in order to introduce agricultural insurance in Azerbaijan
  • Our target is to establish effective, flexible, durable and reliable agricultural insurance system in the country
  • Reasons to develop agricultural insurance in Azerbaijan: increase production, to increase the GDP level, to reach the growth in the share of the non-oil system, increasing food security, to increase investments in agriculture and to improve the lives of farmers
  • Until now we have established a Task Force after consulting the international experience; we have chosen a model and then drafted the Law on "Agricultural insurance"
  • In 2017, the agriculture insurance market reached a GWP of 4,3 million AZN with a market share of 0,8%. Loss ratio is 96%. 4 insurance companies sell these products.
Zeki KARAKURT, Deputy General Manager, Agricultural Insurance Pool (TARSIM), Turkey
  • Agricultural insurance has a long tradition in Turkey with the first products appearing at the middle of the last century
  • TARSIM was founded in 2005 and built as "a public-private partnership in Agricultural Insurance in Turkey". Its main aim is to provide the insurance coverage for such catastrophe risks like drought and frost that cannot be covered by a single insurance company
  • In short, the TARSIM system consists of the Agricultural Insurance Pool and Management Company, which is responsible for managing all works and procedures of this pool. The state-subsidised voluntary agricultural insurance system is one of the best examples of cooperation between the state, private sector and NGOs

Korney BIJDOV, President, National Association of Agricultural Insurers, Russian Federation
  • Thew agricultural segment is holding 4,4% of the Russian GDP..The insurance scheme in Russia was introduced in 2010
  • 60,7 biillion insurance premiums on agricultural insurance between 2012-2017, with state subsidies
  • all the insurance companies that are selling this policies must be members of the National Union of Agroinsurance.
  • in 2017 we changed the system of state subsidized system..thy granted to the local authorities to decide how to use the funds for subsidising the a result the volume of the agricultural insurance decreased dramatically.. We are very interested to change the situation with the subsidies...

Konrad ROJEWSKI, Product Manager - Agriculture, POLISH Re, Poland
  • Crop insurance is a very volatile business which need reinsurance support
  • Generally speaking, in the crop insurance business one can expect a profit margin between 5-15% (premiums minus all deductions like losses, admin costs, sales, loss adjustment, reinsurance) in a long period of time
  • Reinsurance can help in bad years and allow to earn additional money in a good season.

Selim UCER, Co-founder, DOKTAR, Turkey
  • It is estimated that the world population will dramatically increase by 2050. Food resources will also have to cope to this increase: we can either develop new hybrid and chemicals or, much better, invest in Digital Agriculture and create the new and super-intelligent farmer
  • We offer conventional and digital services for agricultural players. We can enhance a farmers' performance by setting-up personalised crop grower protocols and Farmer Support Line
  • The data that we use is collected via sensors and satellites and includes weather, soil and crop information, which we make available to farmers via a mobile app.
  • We currently have the largest active database for farmers in Turkey
  • Using such technologies can lover claims

Oleksandr PRYSHCHEPA, Chief Agronomist Underwriter, Ukrainian Agrarian Surveyor and Loss Adjustment Company, Ukraine
  • In Ukraine we are insuring mainly crops
  • Survey is one of the most difficult processes in insuring agricultural risks
  • The territory is very large and also, it is important that the surveyor speaks the same language as the farmer
  • So, the farmer should be involved in all the operations of the survey

Nikolaus LOBKOWICZ, Head of Facultative Division, Central Eastern Europe and CIS, AON Benfield, Czech Republic
  • The main risk that Ukraine is facing from the perspective of agricultural insurance is concerned is drought
  • AON set-up a dedicated agricultural insurance programme in Ukraine and also a pricing tool that allows for the individual calculation of the insurance premium.

Follow XPRIMM Publications on LinkedIn, for more data on the insurance and financial industry.

Share |

Related articles

Five CEE re/insurers have an "A" rating from A.M. Best

Among the re/insurance companies rated by A.M.Best there are 23 entities domiciled in the CEE, SEE and CIS regions. Out of this total, 5 companies have an "a" Issuer Credit Rating (ICR) and an "A" Financial Strength Rating (FSR)


A.M. Best announces ESMA registration for new Amsterdam office

A.M. Best has announced that it has been registered as a credit rating agency (CRA) by the European Securities and Markets Authority (ESMA) to provide ratings through its new subsidiary, A.M. Best (EU) Rating Services B.V., based in Amsterdam, the Netherlands.


The CEE real estate market - increasing demand for title insurance

"Fifteen years after its introduction, title insurance continues to play a growing role in the CEE real estate market," Jean-Bernard WURM, Co-Founder & Managing Director of Secure Legal Title, London said talking to Property Forum about the trends in the CEE region's real estate sector.


VIG's underwritings up by 2.9% in Q3; year end targets confirmed

Vienna Insurance Group (VIG) continued its stable upward trend in 3Q 2018, achieving a further improvement in key figures. Given the positive development, VIG disclosed for the year end a GWP EUR 9.5 billion target and a result before taxed expected figure of EUR 450 - 470 million.



MetLife named its EMEA head as CEO of Japan unit

MetLife announced that Eric CLURFAIN, currently Executive Vice President and Head of EMEA, has been named Chairman, President and CEO of MetLife Japan - the company's second largest market globally and its largest retail life insurance business, effective Feb. 1, 2019, following approvals.


American International Group appoints new CFO

American International Group announced that it has appointed Mark LYONS to the role of Executive Vice President & Chief Financial Officer (CFO). He succeeds Sid SANKARAN, who will remain at AIG in an advisory capacity through the year-end reporting process for fiscal year 2018.


Wolfgang STOCKMEYER appointed as VIG's BTA Baltic new Board Chairman

Wolfgang STOCKMEYER (49) has been appointed, on 30 November 2018, Chairman of the VIG's subsidiary BTA Baltic Management Board, as part of a series of changes in the composition of its Management Board operated by the main player of Austrian Group in the Baltic region.



Reducing the risks in agriculture by using insurance means, discussed in Skopje

On November 1st, an Agricultural insurance conference took place in Skopje, Macedonia, organized by the Insurance Supervision Agency in cooperation with the Ministry of Agriculture, Forestry and Water Economy. Drawing attention to the necessity of reducing the risks in agriculture by using insurance was the event's main purpose.


IIF 2018 - Insurance in a DIGITAL WORLD

Emmanuel DJENGUE, Innovation Director, Europe - RGAX, Spain is the Keynote Speaker at IIF 2018 - Insurance in a DIGITAL WORLD Conference in Bucharest, on November 27.


See all