IIC - INSURANCE LEADER
We present to Your attention interview with the chairman of the Supervisory Board of the International Insurance Company Khayal Mammadkhanli
Caspian Energy: Khayal muallim, first of all, we would like to know today's opportunities of IIC.
Khayal Mammadkhanli: Thank You. The International Insurance Company (IIC) registered in February 2002 and obtaining a special license to carry out insurance operations owing its authorized capital ($5 mln) has become the largest insurance company in Azerbaijan. The IIC services on such diversified types of insurance as property, vehicles, cargo, personal accident insurance, medical insurance, liability insurance, and a number of such specific types of insurance as the insurance of financial risks, valuables, cash in transit etc. (over 30 types of insurance) are open for our clients.
Although two odd years is a very short period for full formation of a company, we have made all efforts to reach the objective we set for ourselves most promptly. We succeeded to achieve most of the tasks and goals put before us at establishment of IIC. So, the company's structure and working personnel was formed, the process of presentation of our services to the market finished, we ran several marketing and market researches. New professional experts were attracted to the company's leadership. Besides, we managed to establish business relations with insurance market of the country and the neighboring countries, we managed to prevent some problems existing in the insurance legislation.
How do you assess the figures you have achieved this year from the point of view of outlooks?
From the first sight the figures look satisfactory. That is, if during 2003 more than 17,000,000,000 manats of insurance premiums have been received and with this figure our company took the symbolic 6-7 places among the Azerbaijan insurance companies, by results of the first half of 2004 the sum of the insurance certificates equaled to 13 bn 553.8 mln manats. This brought the company to the list of Azerbaijan insurance market leaders. Almost 99% of the received premiums falls on the share of volunteer insurance (13 bn 459.5 mln manats), of which a lions' share falls to the automobile (casco) insurance (1 bn 481.3 mln manats) and liability insurance (8 bn 5 mln manats).
Considering the voluntary insurance, in the first half-year fire insurance policies provided by the company amounted to 650 mln manats, accident insurance policies - 11 bn 580.5 mln manats, accident - 492.6 mln manats, transport (cargo) - 135.3 mln manats, engineering risks - 6 mln manats, medical (health) insurance - 595 mln manats. As to the obligatory insurance, insurance premiums for the sum of 94.3 mln manats have been involved. Besides, obligatory ecological insurance at the sum of 1.1 mln manats, obligatory insurance of car owners' civil liability - 21.8 mln manats, obligatory passenger insurance - 71.4 mln manats.
Thus the company's insurance claim payments in the first half-year of 2004 equaled to 965.7 mln manats, of which 959.8 mln manats were paid on voluntary types of insurance. Besides, in the considered period the company's fire insurance indemnity payments equaled to more than 1 mln manats, accident insurance payments - 567.7 mln manats (all by the category of automobile (casco) insurance), personal accident insurance payments - 7.1 mln manats, transport (cargo) insurance - 14.9 mln manats, medical insurance - 368.9 mln manats. Only one article of the obligatory insurance of the car owners' civil liability constituted the total sum of obligatory insurance payment amounting to 5.3 mln manats.
If to come back to the 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 as well treat not from the standpoint of minimal requirement, but from the standpoint of realization of maximum opportunities. Today the potential of not only our company, but the whole insurance market is much more than our current figures. Because most of the non 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, with exception of only the automobile sold on credit. Naturally, all these are problems of not only our company, its main reason hides in objective factors.
You are the president of the Union of Azerbaijan Insurers, which is establishing the fire risks re-insurance pool…
Actually, ten insurance companies have agreed to enter the pool funded by UAI for the reinsurance of risks on compulsory fire insurance of employers' property. Among these companies there are five members of the union - International Insurance Company (IIC), Mbask, CI Sigorta, Most Insurance and Azal Sigorta, as well as A Group, Azergarant, BE&G, Gunay Anadolu, Azer-Asia, Atasigorta. The pool fund should amount at least 3 billion manats ($600,000). Maximal level has not been defined. IIC intends to add 2 bn manats ($400,000) to the pool. The risks will be distributed among the companies on the basis of the finances invested in the pool.
The pool will be operated by a broker company, Caspian International Broking company that recently joined the UAI. It will manage the pool, coordinate activity of the pool participants and consult in this area.
I must note that there are no restrictions on quantity of pools in our country. The necessity to create pools is linked with the fact that risks of up to 3 billion manats cannot be transferred to abroad for re-insurance, correspondingly, they should be placed in the domestic market. It will as well create an opportunity to reduce the capital outflow abroad, as the major part of the finances goes to western countries precisely when reinsuring.