Azeri market is planning to revise MTPL tariffs and segmentation
"We think it is time to revise the rates for compulsory motor third party liability insurance. At the same time, we propose not just to increase tariffs, but to differentiate them so that tariffs in large cities differ from those in the rest of the country. If the loss ratio is considered, it is much higher in large cities. Russia already uses such a system of differentiation of tariffs, and we propose to use this experience in Azerbaijan," said Mustafa ABBASBEYLI. "I think the tariffs in Baku should be 20 percent higher. Something similar is used in the tariffs for compulsory insurance of real estate, where the insured property is divided on a territorial basis - real estates located in Baku, located in Ganja, Sumgayit and Nakhchivan, and real estates located in other cities. We propose to raise tariffs by 20 percent in Baku, by 10 percent in Ganja, Sumgayit and Nakhchivan, and to keep them unchanged in other places," he added.
Before the last revision of the tariffs the basic cost was AZN 10 per vehicle. In December 2011 the law "On compulsory types of insurance" was adopted and established the basic cost of the MTPL at the level of AZN 50 for vehicles with engine capacity up to 1,500 cubic centimeters. As the engine capacity increases (from 1,500 to 5,000 cubic centimeters), the coefficients from 1.5 to 5 are applied. After revision the basic MTPL cost will be AZN 60 in Baku, and AZN 55 in Ganja, Sumqayit and Nakhchivan. In other regions the cost will not be revised.