OUR REPUTATION - TIG'S KEY OF SUCCESS

 

Caspian Energy (CE): What successes did the Company achieve last year? What prospective plans regarding future development in Azerbaijan does the Company have?

Rufat Musayev, General Director of Thames Insurance Group Joint Company (TIG): On the whole, in 2006 our Company implemented a lot of work. At the moment we are experiencing a rapid development of our business. Our priority is to expand our activity in Azerbaijan and set up new offices throughout the country. It was too early to go to regions 5 years ago, whereas now the insurance market requires expansion of this business segment in the regions of Azerbaijan.

Thus, in 2006 we purchased a new office place and opened a representation of our Company in Ganja where 5 of our employees have already started working. During 2006 the activity of the Ganja office exceeded our expectations and thus created a good image for the Company.

In October 2006 we opened an office in Sheki where we created all necessary conditions for well-run operation.

At the same time, on January 1, 2007 we opened a branch office in Shamkir which offers services to the western regions. These are mainly Tovuz, Aghstafa and Gazah areas.

Besides, in mid September 2006 we opened our second office in Baku. This is a service division, which sells insurance products. Actually, we removed the whole sales department from the head office. As a result, since the second month of operation we have been experiencing a dynamic upgrade that shows high growth rates nowadays.

Last year we worked on creation of favourable conditions for our specialists. We increased salaries and introduced certain benefits. The Company assigns high priority to these processes as there is no business field which can develop without a good team. We have set up such a team. It is expanding all the time. We create all conditions for well-coordinated work of our team.

Last year we worked much on our web-site (www.tig.az). Formerly we offered online-vehicle insurance, whereas last year we added one more insurance type, that is property insurance. It provides 10-percent discount to the customers.

 

CE: What priorities does the Company set for this year?

Rufat Musayev: The number one objective is to establish a network of representative offices. We are creating a base in the regions. Thereafter we will work out concrete insurance projects. At the moment we are opening representative offices in the regions so as to be able to implement new programmes, which are currently underway. Therefore, this year we plan to do our best to expand the network of our representative offices. We are working on opening representative offices in Lankaran and plan to open offices in Guba, Nakhchivan, Gabala and Shamakhy.

 

CE: How will the expanded network of regional offices influence amounts of insurance premiums?

Rufat Musayev: We have another approach to this matter. At the moment we do not plan to enhance collection of insurance premiums. Today we are interested much in offering high-quality work and expanding our network of offices. Our priority is to offer insurance servers on a higher level.

If we are on the right path and increase quality, respectively we will have enhanced amount of insurance premiums in future. I can assure that all works implemented in 2005-2006 have already brought results. It makes us sure that the level of service will get improved after creating the network of offices.

The most urgent point related to insurance premiums is that we are not interested to get more premiums. We want the existing amount to yield higher benefits. Upon collecting a certain sum it is feasible to pay the same amount. That is it should be profit-making like any other kind of business. The profit gained from the amount of collected insurance premiums rather than the amount itself shows the quality of the company's operation. At the moment we have no unprofitable types of insurance. Moreover, they are very profit-making.

 

CE: What results of the overseas activity along with prospective plans outside Azerbaijan does the Company have?

Rufat Musayev: As to our activity outside the insurance market of Azerbaijan, last year we did not find it expedient to open a representative office in Georgia taking into consideration the economic situation in this country. As the office failed to prove feasible we decided to freeze our activity in Georgia and made maximum efforts in Kyrgyzstan, though the political situation in this country left much to be desired after the last year's coup. It made us worry. But as we are not involved in politics, the coup exerted no influence on our activity and does not have any impact even nowadays. At the same time this country is experiencing some economic upturn. Taking into consideration the efforts we made in the company in 2005, I can say that in 2006 the Kyrgyz insurance company underwent a 100-percent advance in its development. In 2006 we changed the office in Kyrgyzstan. It became more spacious. We created better working conditions and formed a good team. The experience we acquired in Baku was used in Kyrgyzstan, so the businesses in both the countries were run almost simultaneously, and it gave a good result in both the locations. So I can say for sure our company has chosen the right way.

Probably, this year our Kyrgyz representation will open its branch office, slightly later than in Azerbaijan as we had to raise the company itself, and after that develop the branch activity. I think we did much over the past year, the company progressed significantly and we now consider opening a branch office in Kyrgyzstan's second largest city.

CE: Are you planning to start business in other countries?

Rufat Musayev: These plans are of a long-range nature. We are not going to do this in the nearest 5 years as we consider the development of existing network a greater priority. However, we have such an idea in a long-term outlook. Time will show.

 

CE: Are you going to introduce any brand new for Azerbaijan's market insurance products and extend the insurance range as whole?

Rufat Musayev: We already have a brand-new insurance product related to cars. It took us a year to develop this product, a difficult type of insurance, and it was easy to make a mistake in the very beginning. In this connection we approached this issue very carefully and involved foreign experts. Currently, we are creating a database for this type of insurance, so as to introduce it to our clients and launch it this year. This will be a surprise for our market.

Today, we are licensed to provide 17 types of insurance. We are mainly engaged in 10 of them. The remaining seven types of insurance are being worked out.

The company's nearest plans include developing insurance in agrarian industry. But this issue calls for a network we are currently expanding across Azerbaijan, following which we will be actively working in agricultural insurance.

 

CE: What is the overall growth dynamics of the company?

Rufat Musayev: It is quite good. In terms of denominated mantas, in 2001 insurance premiums grew by less than 200,000 manat (AZN), and in 2002 slightly more than by 250,000 AZN. In 2003, we registered a rapid double growth, resulting in collection of nearly 500,000 AZN of insurance premiums. The further the harder, we can say in 2004 we preserved the growth rate (almost 70%) and gained 740,000 AZN. The similar growth rate (70%) was registered in 2005 as well. Insurance premiums reached almost 1,194,000 AZN, whereas payments under insurance accidents amounted to 193,000 AZN.

Surely, in 2006 we could not maintain the 70% growth and now it is some 40%. In total, we collected 1.6 million AZN of insurance premiums in 2006. The payments under insured accidents amounted to 322,000 AZN.

 

CE: According to your insurance portfolio, what is the niche your company secured within segments of insurance market? Is there any development in medical insurance?

Rufat Musayev: There is a development in medical insurance, but, as I have already mentioned in my previous interview for Caspian Energy, this is not a priority field for us. The priority field was liability insurance and vehicle insurance. By the results of last year, I would say most insurance premiums have been collected under voluntary vehicle insurance, fields of liability insurance and other segments of the market become more active.

 

CE: Are you participating in mortgage crediting?

Rufat Musayev: No, today we do not see the volumes of this market segment to be handled in the nearest future. Naturally, this issue implies gaining some significant amounts in the outlook, but we do not expect considerable repayment within the nearest 1-2 years.

Nevertheless, this year we might join mortgage crediting insurance. But in 2007 this segment is not a priority issue for us.

 

CE: What are the issues to be solved for the sake of further development of insurance market in Azerbaijan?

Rufat Musayev: The new law draft on insurance has recently been drawn up and submitted to Milli Majlis (Parliament) of Azerbaijan for discussion. Thus, what we talked of with you a year and half back is now coming true. This draft was issued to insurance companies to learn their opinion and vision of this process, and our company was one of those to have submitted their proposals on drawn-up draft. I hope all this will be discussed.

We are expecting the new law on insurance to be adopted. All we thought of and wanted to see in Azerbaijan is reflected in the draft. It concerns insurance and reinsurance, as well as companies' capitalization. In general, we are satisfied with the new draft.

In our opinion, one should pay more attention to reinsurance. Not with the purpose to secure maximum funds in the local market, but to increase the quality of reinsurance process as such.

At the same time, one should work to raise the quality of insurance services and products in this market.

 

CE: In your previous interview for Caspian Energy you mentioned about change of founders... How does TIG's stockholders structure look today?

Rufat Musayev: The history of Thames Insurance Group begins in 1996 when Anglo-Azerbaijan Insurance Company was established. The founders were Riceman Investment Limited (49%) and three natural persons of Azerbaijani origin (51%). The change in constituent structure in 2001 has resulted in change of company name. Now it is Thames Insurance Group (UK/Azerbaijan). Having purchased Riceman in early 2004, Glencarron Group (49%) became a British founder of Thames Insurance Group. Most recently, three natural persons - citizens of Azerbaijan have sold their stock to Gala Investment, the entity of Azerbaijani origin that raised its stock in Thames Insurance Group to 51%. Such a proportion of stocks (51%/49%) comply with the regulatory of Azerbaijan. I would like to outline the role and contribution of Francis Matthew, Director of TIG, in the development of the company. His rich experience helped us implement all these processes much faster. Innovations in the financial sector were quite sensible following Emil Gummatov's appointment as a Financial Director with TIG. Thus, the company's financial policy and quality of insurance work has changed. I would like to thank all employees of the company, managers, insurance specialists, insurance market managers, in particular Parvana Hajiyeva, Emin Aleskerov, Nazrin Masimova, Mehriban Allakhverdiyeva. The last year was great indeed due to great merits of the company's team.

 

CE: What is your vision of the company's further development?

Rufat Musayev: This time we spoke of many innovations and undertakings the basis for which had been laid several years ago. The company's strategy today is to develop all we already have as it is too early to say it meets the highest world standards. All we need is time. We are still at the stage of development. For this reason we do not want to disperse too much in our activites. We will rather work, raise the quality of all we have today, as well as to put in practice the plans we have drawn up for the coming 2-3 years.

We have drawn up a 5-year development plan and doing our best to implement it. And in case the market needs something different, we will be working to master these new areas.