STATISTICS: AZERBAIJAN, 1H2016: Insurance business is directly dependent on banking sector; for 3 insurers and 88 intermediaries were revoked licenses'

During the first six months of 2016, the Azerbaijani insurance industry grew, in local currency, by 17.72%. Due to strong devaluation of the local currency (AZN) against USD/EUR, by almost 45%, in the European currency the insurance market decreased by 19.18%.

In context of the weakening national currency, the non-life insurance segment is still in recessions and the insurance business is directly dependent on the banking sector, given the affiliation of several insurance companies to the banking system. As known, during last year the banking system of Azerbaijan has seen revoked licenses' for 10 banks.

The banking sector's problems have affected the insurance sector as well. ALFA Insurance has been declared bankrupt on August 29th. Given the bankruptcy of its sole owner, Texnikabank, ALFA Insurance's financial situation became even more critical, as no capital injection was possible.

Moreover, the financial authority took several measures in order to strengthen the financial stability of the market. For example, transfer of the insurers' capital in parent banks will no longer be taken into account as investment of the insurer. Earlier, insurers placed statutory capital and reserves in their parent banks, passing them off as investments.

In the reporting period, in Azerbaijan have been operating in total 28 insurance companies, for three companies (QARANT Sigorta, ERA-TRANS Sigorta and CHARTIS Azerbaijan) licenses being revoked. The supervisory authority has also revoked the licenses of 88 insurance intermediaries (two legal entities, 86 individuals).

M&A operations are also part of the current market reshape, BUTA Sigorta transferring its insurance portfolio to GUNAY Sıgorta. On the other hand, QALA Sigorta, daughter company of leading reinsurer AzRe Reinsurance's, has received a license to enter on the MTPL market.

The share of Azerbaijan's leading insurance companies (TOP 5) in terms of GWP increased from 57.63% to 64.35% in the first half of 2016.

Access www.xprimm.com and download the 1H2016 Azerbaijani insurance market statistics.

Note: A full version of comprehensive analysis of Azerbaijani insurance market's performance for 1H2016 will be available in the forthcoming edition of the XPRIMM insurance Supplement - Azerbaijan, to be relased in Baden Baden, on October 23rd, 2016, on the occasion of the XPRIMM Reception and AZERI Evening.

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

Share |

Related articles

AZERBAIJAN: temporary administration institution established in insurance

The presidential decree of Ilham ALIYEV on amending the Law on insurance activity provides for the right of the Financial Market Supervisory Authority of Azerbaijan to introduce temporary administrators in Azeri insurance companies or dismiss their top management from duty, as the news agency Trend wrote.

2019-02-07

AZERBAIJAN: Azer ALIYEV re-heads Azerbaijan Insurers Association

Azer ALIYEV has been appointed the new chairman of the Azerbaijan Insurers Association (ASA). Association's ex-chair Mustafa ABBASBEYLIi has been assigned advisor to Labor & Social Protection Minister Sahil BABAYEV, as analytical and news agency FINEKO and ABC.AZ wrote.

2019-01-23

ON THE MOVE

GENERALI Group results for year 2018

In 2018, GENERALI Group operating result reached EUR 4,857 million (+3.0%), with a net profit of EUR 2,309 mil. (+9.4%). The total gross written premiums (GWP) of the Group amounted EUR 66,691 mil. (+4.9%).

14.03.2019

MetLife announced leadership changes as part of CEO transition

MetLife announced a series of changes to its senior leadership ranks in connection with its CEO transition, all of which are effective May 1, 2019. In January 2019, the BoD announced that Michel KHALAF, President, U.S. Business and EMEA, will become MetLife's President, CEO and Member of the Board effective May 1, replacing Steven KANDARIAN, who is retiring.

14.03.2019

HANNOVER RE launches an insurtech innovation platform

Germany-based Hannover Re launched a platform designed to bring the insurance companies and insurtech innovators closer. Through the "hr | equarium" platform, Hannover Re wants to facilitate the connection between supply and the demand for insurtech solutions, taking advantage of its worldwide spread.

14.03.2019

TOP EVENT

Conclusions: TBILISI - the first Georgian International Insurance Conference

Today takes place in Tbilisi the first Georgian International Insurance Conference, an event that will put under scrutiny the current status and the future development perspectives of the local market, in an attempt of identifying the main growth opportunities. The forthcoming launch of the mandatory MTPL system is the most important topic on the agenda, as this new line of business has the potential to provide for a significant growth, but also to become a market disruptor.

14.03.2019

Motor insurance - becoming more financially efficient and consumer friendly

Under the strong pressure put by the technological evolution, the motor insurance business is rapidly changing, both in operational terms and, most visible, in the way insurers are interacting with their customers. Step by step, the insurers' relationship with customers evolves from simply indemnifying insureds for the losses suffered because of road incidents, to helping them prevent incidents and rapidly recover after the accidents that couldn't be avoided.

27.02.2019

See all