Number of foreign reinsurance companies pulled out of Azerbaijan market

Baku. 24 February. REPORT.AZ/ The main problem of insurance companies operating in Azerbaijan is associated with capitalization. 

Report informs, Chairman of Board of Directors of Financial Markets Supervision Chamber (FMSC) Rufat Aslanli told reporters.

According to him, on the one hand the companies have difficulties with collection of money for insurance products sold through resellers, on the other hand, as the companies suffer from capital shortage, they transfer considerable part of their funds to foreign partners for reinsurance.

“Eventually, the main function of insurance companies was transfer of funds. But upon insurance claims, payments were made by companies themselves, not by reinsurers. This is mainly related to professionalism. Our insurers couldn’t see requirements set by leading insurance companies of the world with 100 years of experience. They are monsters of global financial market and sell to Azerbaijani insurance companies not individual, but ready standard products. That’s why to receive payment from them upon insurance claims was a problem”, R.Aslanli noted.

According to him, requirements to foreign reinsurance companies has been tightened, some of them pulled off Azerbaijani market, which prevented inefficient outflow of insurance funds to foreign markets. At the same time, control over sale of insurance products in domestic market has been tightened. For example, compulsory insurance of automobiles has been transferred to electronic platform, so that to enable local insurers to fulfil their obligations through sound capitalization.