BAKU, Azerbaijan, May 21
By Yusif Aghayev – Trend:
The statement made by the Central Bank of Azerbaijan about annulment of the license and initiation of bankruptcy proceedings of Azerbaijan’s Standard Insurance company was a message for the country's insurance community, Azerbaijani expert in the field of insurance Khayal Mammadkhanli told Trend.
“Of course, the company had certain problems, primarily related to the capital,” Mammadkhanli said. “However, these problems occurred in 2016 after the bankruptcy of the company's parent bank, Standard Bank, was announced. The company had certain difficulties from that period till early 2020.”
The major positive changes were observed in the company’s activity in early 2020, namely, the process of recovery and diversification of the insurance portfolio was launched.
The compulsory types of insurance prevailed in the company’s portfolio in 2019. Several corporate clients were attracted in voluntary types of insurance in the first quarter of this year. The company won one big tender.
A new organizational structure has been recently approved. The job responsibilities of employees were changed. Some structural units were divided and became independent from each other.
As a result, the company ranked 11th in the ranking of domestic insurers in terms of collection of insurance premiums worth 3.4 million manat ($2 million) in the first quarter of 2020. The high growth dynamics by 1.8 times was observed compared to the same period of last year.
However, despite the actions of improving the financial condition of the company, the company could not overcome all the problems, which served as the basis for the closure of the company.
Standard Insurance OJSC was established in 2002 as a full-fledged insurance company operating in the non-life insurance segment.
Today, the company has a license to carry out four compulsory and 24 voluntary types of insurance. As a result of the activity in 2019, the company collected the insurance premiums in the amount of 14.06 million manat ($8.3 million) and paid insurance claims in the amount of 5.4 million manat ($3.2 million), ranking 14th among domestic insurers.
In accordance with Art. 4, 109.1.2, 118.1.1 and 118.1.2 of the Law on Insurance Activity of the Republic of Azerbaijan upon the decision of the Board of the Central Bank of the Republic of Azerbaijan dated May 19, 2020, the license for carrying out Standard Insurance company’s activity was canceled, a temporary administrator was appointed in the company and a statement was sent to the court to initiate the company’s bankruptcy proceedings.
Today, 21 insurance companies and one reinsurance company operate in Azerbaijan.
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