According to ISMAYLOV, at the beginning of 2019, the leader of the Azeri insurance market (with ~one third of total GWP and the leader of life insurance) was negatively affected by changes in tax legislation, which led to a decrease in the company's portfolio by 20%. Also paid claims from January to October increased to about AZN 74 million, while GWP amounted to AZN 180 million.
Despite these challenges, PASHA Life Insurance increased its GWP from compulsory industrial injuries insurance and introduced a new life insurance product that brough the company about AZN 16 million as well.
In 2020, the insurer aims to collect AZN 220 million in GWP, 20% of it coming from new products, 70% from compulsory insurance and universal life insurance, and the rest of 10% from credit life insurance.
The entrance of the 4th life insurer in 2019, Xalq Life Insurance, as well as the planned entrance of another company, Mega Life, was positively assessed by the market leader, since increased competition helps improve quality and penetration degree of insurance, which currently does not exceed 4-5%.
Besides competition, market development depends on digital technologies. According to PASHA Life Insurance, one important strategy of insurance companies should be the focus on digitalization, as business must switch to a new format. Thus, the insurer plans to start using the Agile software for universal life insurance in 2020.
Among one of the key events of 2019 in the Azeri insurance market, as noted by experts, was the liquidation in December of the Financial Market Supervisory Authority of Azerbaijan (FIMSA) and transfer of the its functions to the new regulator, the Central Bank.
As ISMAYLOV noted, reforms and legislative changes will contribute to strengthening the country's insurance market, improving the insurance culture and growth of the material well-being of the population.
*EUR 1 = AZN 1.9035 (as of 30.12.2019)