LIDER OF INSURANCE MARKET

C.E.: How do you estimate the figures you have achieved in 2003 from the point of view of prospects?

- From the first sight these figures look satisfactory. That is, during 2003 more than 17,000,000,000 manats of insurance premiums have been received and with this figure our company has taken the symbolical 6-7 places among the insurance companies. Almost 99% of the received premiums fall on the share of voluntary insurance, most of them are vehicle (Casco) and property insurance premiums.

Coming back to essence of the question, I do not think these figures are optimal from the point of view of our opportunities. You know, by character I am a person, who likes self-criticism and from the administrative point of view I am not a leader who "satisfies with small", or "stops on what is achieved". I regularly treat problems critically and search for ways of their solution. And this question I also treat not from the point of view of minimal requirement, but realization of maximum opportunities. Such criterions as planning and/or minimal requirement are left in the Soviet time. Today the potential of not only our company, but the whole insurance market is much more than our current figures. Because most of the not mastered market is beyond the capital, and we have not managed to acquaint provinces with the kind of services, as insurance yet. Secondly, our clients are basically legal entities, and insurance market is suffering problems in the field of individual insurance sales, with exception of only the automobiles sold on credit. Naturally, all these are problems of not only our company, its basic reason hides in objective factors.

C.E: The international Insurance Company has been working for already more than 2 years. Has this period justified your hopes from the point of view of the purposes, which you had put before?

In general, in spite of that 2 years is a big period from the point of view of time, it is not such a big period from the point of view of creation and formation of a professional insurance company. In West at least 3 years is needed for creation of such kind of a company. You know, any company may pass state registration as legal person, receive license and sell insurance products. It is the official side of the business, but formation as a professional and famous company requires much time and hard work. Because, the product sold by insurance companies is not an article of food, but a promise to pay the damage caused to the client. The more grounded and trustworthy is this promise, the higher is the level of trust of the company's clients.

We have managed to achieve most of the tasks and purposes put before ourselves during establishment of the IIC. So, the structure and working personnel of the company have been formed, the process of presentation of our services to the market has finished, we have run some marketing and market researches. New professional experts have been involved to the company's leadership. And also, we managed to construct business relations with insurance market in our country and neighboring countries, removed some problems existing in the insurance legislation. We became the winners of the "Ugur-2003" award in the nomination of "The Insurance Company of the year" in 2003. At last, as you see, we even found time to collect sufficient insurance premiums. Certainly, it was a joke, but generally, I can say, "our hopes were justified".

C.E.: When your company was created it was noted that activity of IIC will play a huge role in reinsurance of the risks of the country's insurers. The sum of involved reinsurance premiums have already exceeded 800,000,000 manats. Are you satisfied with this result?

You are quite right. Creation of IIC led to a special revival in the Azerbaijan insurance market, total market capital and both directly and indirectly the opportunity of storing risks increased almost twice. The opportunity of storing big and medium insurance risks in the republic has increased. Because, authorized capital at the sum of $5,000,000 is a very serious figure for an insurance company in the Azerbaijan Republic. If to take into account our opportunities, you may think that 800,000,000 manats is - not such a big sum. But, it is enough for a recently created company. Because, a company being at the formation stage must keep aside from risk speculations, conduct policy of small, but stable reception of insurance risks. Otherwise, some cumulative or catastrophic insurance perils, in other words, insurance risks assembled in one portfolio can not only undermine financial stability of a company, but also bust it. Therefore, we, leadership of the company have defined the limit of storage of our insurance risks not within limits of our opportunities, but within limits of our aspirations during the past time. But, in future this limit will keep developing on the increasing line, according to the company's assets and profitability level.

C.E.: At what stage is formation of insurance culture today and what role does IIC play in this process as the biggest insurance company?

At last we reached the problem, which slows down development of insurance market and creates majority of our problems.

Culture is the major factor in development of any branch. I will not be mistaken, if I say that it is also the basis of insurance. Because insurance requires a considered approach and high service culture, as it is a question of welfare and social maintenance. Only in case of high insurance culture service, a company may qualitatively improve the level of its work from day to day.

Today the level of insurance culture of population in Azerbaijan is very low. In other words, it develops in a one-side direction, that is, from the part of insurance companies.

First of all, it is a pity that the impression created by the Soviet system in the thinking of people repeats today also in our national market. I assure you, majority of the population still does not know that many professional non-state insurers are working in Azerbaijan. The second factor is that the population has a very limited information about insurance branch. A client, who turns to the company only in case of necessity, often gets confused of the favorable conditions. Third, the fact that most part of the population does not have big incomes forces them to solve the problems, which they regard more important than insurance.

Due to the factors I have listed, while insurance premium basket is $6-7 mln per capita in western countries, this figure equals to $5 in our republic, and the share of insurance in GDP is only 0.7 - 0.8%.

As to the works we are running in this direction I should note that some measures have already been carried out at our initiative, in April 2003, as you know, the Union of Azerbaijan Insurers was founded to accelerate these works and remove the emptiness observed in this sphere, and I was elected to the post of the president of this Union.

Within framework of the Union representing 5 largest insurance companies of Azerbaijan (MBask, Azal Insurance, CI Insurance and Most Insurance) headed by IIC tens of important tasks have been done during a year. In November 2003 a scientific-practical workshop at the theme of "Insurance and Society", "the role of insurance in economy" was conducted at the Azerbaijan Economic University, an agreement on mutual cooperation was signed with this university, and April 2004 became especially successful and significant. That is, as you know, on 2nd of April we celebrated the first anniversary of creation of this Union, and also ran presentation of the web-site, a source of information about insurance market of both Azerbaijan, and behind its limits. And, at last, for the first time in the history of Azerbaijan insurance, we presented the first issue of the magazine "Garant Azerbayjan" ("Quarantor Azerbaijan") dedicated to the Azerbaijan insurance market, its problems and ways of their solution, study of the international practice. Such events directed to development of insurance market and education of the population will be frequently carried out also in future. In conclusion, I can say that despite of all problems, insurance market of Azerbaijan is firmly developing and my forecasts for the future, as a professional insurer, are very optimistic. I wish good luck to all of us in this job.