Fuad Kuliyev is Chairman of the Supervisory Board, “AzRe Reinsurance” OJSC. Fuad Was born in Baku, Azerbaijan and graduated with honours from Azerbaijan Medical University and the financial faculty of Azerbaijan State University of Economics. He has a Certificate of Chartered Insurance Institute. Fuad has been in the insurance business since 2002. Prior to 2011 Fuad was the Deputy Chairman of the Board of “Standard Insurance”, Azerbaijan. Fuad has also worked in the Russian insurance market: IIG “Osnova” LLC (Deputy General Director), “AFM Insurance brokers” LLC (Executive Director). Fuad Kuliyev has been with “AzRe Reinsurance” OJSC since 2012.
BEYOND MENA: A REVIEW OF EMERGING MARKETS AND THE IMPACT OF CHINA 1BIR
Can you give a brief summary of the market in your country?
- As I explain in my presentation, we have 21 insurance companies and one reinsurer. Of course the major brokers are also present. The market grew by 30% from 2017 to 2018 though a large amount of this was getting back to normal after 2 devaluations of our currency in 2014, but also a large growth in the Life sector which accounts for 46% of the total.
- The portfolio is well balanced with only 17% from the motor branch.
- Premium income is now $ 430 million and still growing fast though we would still say that we were underinsured as a nation with penetration at only 1% of GDP.
- 87% of the market is concentrated in the hands of the top ten companies.
- The market has been regulated by FIMSA, the Financial Markets Supervisory Authority which also regulates banking and securities since 2016.
What are the latest developments and prospects for profitable growth?
- I think that the importance of the Life branch will subside due to changes in tax legislation and that non life will grow due to major projects in the oil and gas field and also the diversification of the economy and incentives towards agricultural development.
- Medical business will also grow but unlike in Georgia we now classify this business as social security.
What is the role of international reinsurance?
- 20 cents in the dollar is spent on reinsurance and my company, Az Re take about 40% of that on an optional basis, leaving the rest to the international market.
- We do have a propensity to earthquakes being south of the Caucasus mountains and here of course it is sensible to shift our exposures into the international markets.
- The market as a whole is well capitalised and generally the reinsurance demand is more for facultative business than treaty at the moment. However as the insurance for immovable property is compulsory by law I would expect that demand for cat reinsurance will eventually increase, though it will take time.
What are the opportunities arising from one belt one road?
- I would think that more cargo cover will be required due to the opening of the railway link to Kars in Turkey.
- Our geographical situation as a Caspian nation and next door to Iran can only show an upward trend.
- Construction of the new port at Alat on our Caspian shore will also bring more premium to our market and we would anticipate more trade north-south and south – north which will benefit the market.