CMTPL insurance market in Azerbaijan: - PowerPoint Presentation

Slide1

CMTPL

insurance market in Azerbaijan:current trends,bonus-malus system,problems, claims, expectations

AIIF - 2013 Azerbaijan International Insurance Forum

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CMTPL INSURANCE MARKET IN

AZERBAIJANCompulsory Insurance Bureau (CIB) started to operate since December 2011 and CMTPL insurance under the new

Law “On compulsory insurance” are issued effective from 16 December 2011.

It

is

required by the Law that an insurance company intending to operate under CMTPL insurance must be member of the CIB. Currently, CIB has 12 members.

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CURRENT CIB

PARTICIPANTS“ATESHGAH”“STANDARD Insurance”

“ATASIGORTA”

“XALQ Sigorta”

“

PASHA

Sigorta”“AXA MBASK”“Azsigorta"“ALFA Insurance” *“AZERSIGORTA”"MEQA Sigorta""İPEK YOLU Sigorta""AZERBAIJAN Senaye" 

* Permission

to issue a CMTPL has been withdrawn e

ffective 03.07.2012

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CMTPL

INSURANCE PREMIUM (ANNUAL)

Physical (AZN)

Legal

(AZN)

CARS AND OTHER VEHICLES MADE ON THEIR BASE;min 50- max 250min 60- max 300LORRIES AND OTHER VEHICLES MADE ON THEIR BASE;min 150 – max 250min 180 – max 240

MINIBUSES, BUSES AND OTHER VEHICLES MADE ON THEIR BASE;

min

150

- max 200

min 180 – max 300

MOTORCYCLES AND MOTOR SCOOTERS;

50

60TRACTORS, THE VEHICLES USED IN ROAD-BUILDING WORKS, WOOD AND RURAL FARMS

50

60

TROLLEYBUSES AND TRAMS.

100 AZNFor vehicles registered abroad

entering the Azerbaijani Republic for the purpose of transit (for one month) –

coefficient 0.254

AMOUNTS OF COVERAGE

UNDER CMTPL INSURANCE5

TOTAL AMOUNT OF

CMTPL INSURANCE PREMIUMS – 72,134,846 AZNDECEMBER 2011- 2012:A TOTAL OF 917,622

CONTRACTS OF CMTPL INSURANCE POLICIES

HAS BEEN ISSUED BY 12 PARTICIPANTS OF

CIB

CMTPL

INSURANCE STATISTICS6

NUMBER OF CMTPL INSURANCE CONTRACTS:

COMPARATIVE ANALYSYS FOR 5 MONTHS OF 2012 AND 2013

385 517

370 718

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,9% January-May 2012 January-May 20137

Pursuant to the amendments to the Law “On Road traffic”

effective

from April 2013, the requirement for annual technical expertise of all auto vehicles was canceled and replaced by different regularity for different categories of vehicles. This can be shown as one of the reasons for the decrease in the number of CMTPL insurance policies for the 5 months of 2013

AMOUNT OF

CMTPL INSURANCE CONTRACTS:COMPARATIVE ANALYSYS FOR 5 MONTHS OF 2012 AND 2013

28,713,523

AZN

27,170,818

AZN

5,4%

January February March April May

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January-May 2012

January-May 2013

AVARAGE CMTPL PREMIUM:

COMPARATIVE ANALYSYS FOR 5 MONTHS OF 2012 AND 2013During the first 5 months of 2013 in comparison with the corresponding period of 2012 there have been an increase of 1,6% in average CMTPL insurance premium.

The same indicator with respect to the insurance contracts concluded for a year

was increased by 0.03%The increase in the number of CMTPL policies obtained by legal entities by 8.3% as well the increase by 7.1% in the number of trucks with higher premiums were the reason for the increase in the average CMTPL insurance premium for 5 months of 2013.

January February March April May

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BONUS-MALUS

SYSTEM10Bonus-Malus system is applied on 15 January

2013. There are 17 BM classes. Class 6 is taken as the default. Classes 7-17 are Bonus, and Classes 1-5 are Malus.

The

BM class

decreases only with respect to a

small portion (0.4%) of policy holders. BM class is increased with respect to 14.6% of policy holders, and significant portion (85%) of policy holders maintains status quo. So in general, the CMTPL policies become cheaper – next year majority of customers will pay less for CMTPL policy.

CMTPL

INSURANCE STATISTICS

Number of vehicles

registered abroad entering the Azerbaijan Republic

during 2012 for

the purpose of transit

– 224 527 (total number of countries 115)11

PAID CLAIMS UNDER CMTPL INSURANCE

Damage to property

Damage to vehicles

Death of the person

Damage to health

TOTAL

Quantity92406424 474227Amount

175,158

AZN

6, 489,472

AZN

120,000 AZN

39,000 AZN

6, 823, 630 AZN

On the basis of official statistics, during 2012 there were 2892

road accidents in Azerbaijan resulting in 2997 damages to health, and

1168 death. In comparison with the number of road accidents and associated damages to health and cases of death, the number of paid claims thereunder is much more less.

2012 January - December 12

PAID CLAIMS UNDER CMTPL INSURANCE

Damage to property

Damage to vehicles

Death of the person

Damage to health

TOTAL

Quantity1816135361066458Amount

315,066

AZN

8, 400,635

AZN

1

80,000 AZN

96,6

00 AZN

8,992,301 AZN

This

is 52% more than total number of paid claims in 2012, and  31

% more than the amount of paid claims . 90% of the paid claims are in respect to insurance contracts concluded in 2012, and

10% in respect to contracts concluded in 2013.  

2013 January - May

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There were

1148

road accidents in Azerbaijan during 2013 January – May resulting in

1247

damages to

health (claims paid are only with respect to 8.5% of cases of damage to health),

and

443

death (claims paid are only 8.1% of death cases)

The number of road accidents has increased by 10%, number of dead persons by 41% and injured persons by 9%.

TERMS OF COMPENSATION of CIB

Pursuant to the requirements of the Law “On compulsory insurance”, compensation shall be covered by CIB in the following cases:in case an insurer is not able to meet its obligations due to its insolvency;in case of a third person’s injury by an unknown motor vehicle;in case of a third person’s injury as a result of use of a vehicle operated by a person, who had no

CMTPL insurance contracts for civil liability of owners of vehicles (provided

that, despite a claim being put forward by a victim against the owner of the car to remedy the damage, this claim was not

satisfied

)

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COMPENSATION BY CIB

Damage to health

Death of the person

TOTAL

Quantity

0

11Amount05,000 AZN

5

,

000

AZN

2012 January - December

Damage to health

Death of the person

TOTAL

Quantity

64

10

Amount

6,691 AZN

20,000 AZN

26

,691 AZN

201

3

January

-

May

15

Note: Rejected

Claim – 3,

Claims under consideration - 4

and

Subrogation Opened Claims - 2

«CIB INFORMATION SYSTEM

»CIB information system has been developed in accordance with the provisions of the Law “On compulsory Insurance” and has the following goals:centralized system of CMTPL

policy issue & registrycentralized depository of claim associated documentation

automatic system of bonus-malus calculation and associated premiums

centralized database of insured persons and vehicles

facilitate statistics and reporting

informationSMS notification during every transactionWhile creation of infrastructure there was used the modern equipment and licensed  software of world  leading IT producers. The protection of intellectual property is one of the main directions of Bureau`s IT policy. The information system of CIB was subject to checking on foreign interventions and finding out the weak points by IT audit company. The safety of assessed information system was positively evaluated and at the moment the technical works continue in the field.  16

DEVELOPMENT

PERSPECTIVESIntegration of electronic information system with information systems of the Ministry of Internal Affairs, State Traffic Police, State Migration Service and the Ministry of Taxes.Integration will enable elimination of paper blanks

Inclusion of other types of compulsory insurance into CIB information system

Ensuring integration of electronic information system between participating insurance companies and the CIB

Entry of the CIB into the “Green

card

” systemDeveloping current claims registration system to the advanced claims management information systemImplementation of high end systems and procedures for control over and fighting against uninsured auto vehicle owners17

Thank

You!AIIF - 2013 Azerbaijan International Insurance Forum

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