BAKU, Azerbaijan, Apr. 8
By Yusif Aghayev - Trend:
The Compulsory Insurance Bureau of Azerbaijan is operating normally, Executive Director of the bureau Rashad Ahmadov told Trend.
Ahmadov said that most employees work remotely, that is online, adding that existing procedures and digital solutions in the bureau allow doing this without loss of efficiency.
Touching upon the current situation in the segment of compulsory types of insurance, Ahmadov noted that despite the strengthening of special quarantine measures and restrictions on the movement of citizens, there are currently no special changes in the dynamics of execution of agreements on compulsory insurance.
“The conclusion of these agreements on the types of compulsory motor third-party liability insurance (OSAGO) and from industrial accidents and occupational diseases is carried out online and the physical presence of the client for their execution is not required. On the other hand, the introduction of restrictive measures had a positive effect on reducing the number of insured events,” the executive director said.
Touching on the increase in loss ratios on compulsory types, especially by OSAGO (increasing the loss ratio in the OSAGO segment from 87 percent in January to 92 percent in February 2020), the executive director noted these are temporary indicators and it is wrong to judge them about the loss-making for the whole year.
“There are certain months in the OSAGO segment, during which fees under this type increase sharply, and this is due to the obligation to undergo a technical inspection of a car. In general, I believe that the loss ratios for this type of insurance in 2020 will be even lower than in 2019, due to restrictions on the movement of citizens,” he stressed.
The leaders of a number of insurance companies in Azerbaijan, commenting on the situation associated with the economic recession in the country as a result of the spread of coronavirus infection, due to which the insurance sector is severely affected, expressed wishes about a reduction in the contributions that insurers transfer to Compulsory Insurance Bureau.
In accordance with the law on compulsory types of insurance, calendar contributions, as one of the sources of reserves for compensation payments, are regular contributions paid to the bureau by insurers-participants every month in the amount of 5 percent of insurance premiums received under compulsory insurance contracts. Calendar contributions are transferred to the appropriate account of the bureau for each month within 15 calendar days from the last date of the month.
According to Chairman of the supervisory board of the Azerbaijan Insurers Association (AIA) Azer Aliyev, the size of these contributions (5 percent for each type) significantly affects the profits of insurers, especially in the OSAGO segment, where loss ratios show constant growth.
Focusing on this issue, Ahmadov noted that the relevant actuarial calculations in this direction were not made in the bureau, and if necessary they will be made. In any case, all issues related to amendments to the current legislation relate to the prerogative of the financial market supervision authority - the Central Bank of Azerbaijan (CBA).
In accordance with the Action Plan on the implementation of the order of the President of Azerbaijan dated March 19, 2020 “On a number of measures to reduce the negative impact of coronavirus (COVID-19) and sharp fluctuations as a result of coronavirus in the global energy market and stock market, on the economy of the Republic of Azerbaijan, macroeconomic stability, issues of employment in the country and business entities" approved by the Cabinet of Ministers on April 4, the banks and insurance companies in Azerbaijan are exempted from making payments to the Central Bank of Azerbaijan in April 2020.
