Baku, Azerbaijan, Feb.27
By Azad Hasanli - Trend:
A-Group JSC plans to make changes in its development strategy in connection with the adjustment of the manat exchange rate, the chairman of the insurance company Anar Bayramov told Trend Feb. 27.
"Of course, there will be changes, however, first of all, we need to assess the situation in the context of its impact on the activity of our company, observe further developments on the market," he said. "The adjustment of our work and development strategy will depend entirely on the economic situation in the country and the conditions which our providers will give us. If the pharmacy chain raises the price for drugs and clinics increase the cost of medical services, then insurance companies, including the A-Group surely will be forced to revise their tariff policy."
The head of the company said that in this regard, on Feb. 26, the Association of Insurers of Azerbaijan held a meeting of the Supervisory Board, during which various risks that may cause weakening of the manat were discussed.
"Naturally because of this [change of manat rate] costs and payments of insurance companies will increase, because subcontractors, our service providers, will be forced to raise their prices and tariffs. So it all will have an impact on the insurance market," he said.
The payments of insurance companies will increase, but the issue regarding premiums is still not clear, according to Bayramov.
"We have a lot of contracts concluded in manats and in any case we will comply with our commitments to customers, even if it is unprofitable, and we will be in the red," he said, adding that the increase in the size of premiums will be smooth and will not affect existing contracts. "As for the size of premiums, we cannot increase them now. But during the conclusion of new contracts we will have to take these changes into account."
On February 16, the Central Bank of Azerbaijan (CBA) decided to waive the peg of the manat to the US dollar and move to the two-currency basket using the US dollar and the euro when determining the rate of the manat.
On February 21, the Central Bank of Azerbaijan established exchange rate of the manat to the US dollar at 1.05 manat per dollar (compared to 0.7844 manat earlier), which corresponds to the cheapening of the rate by 33.9 percent.
The official exchange rate of the US dollar to the Azerbaijani manat for Feb. 27 is set at 1.0498 manat.
A-Group insurance company was founded in 1995. The insurance company provides health insurance, accident insurance, property, vehicles, travel insurance, liability insurance and other species.
Currently, A-Group is a leader on the voluntary health insurance market in Azerbaijan.
Local, European and Russian companies, in particular, Polish Re, Russian Re and others render reinsurance services to the company.
In January 2015, the company collected premiums worth 522,280 manats with payments worth 531,870 manats. By the end of 2014, the company's insurance fees totaled 12.45 million manats, which is 12.16 percent more than in 2013. During the reporting period, payments amounted to 7.4 million manats (8.8 percent increase).
Edited by CN
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