Interview with Azer Aliyev, newly-appointed Chairman of Board at insurance company Atəşgah
- How will the situation in the Company change after its leadership replacement, in particular with Your return to the post of the Chairman of the Board at Atəşgah?
- As development strategy 2016-18 is still in force, no grave changes in Company’s management are expected. The Strategy demands are fully consistent with the current requirements and will be actual in 2018, too. The main goal of Atəşgah’s business development strategy is achievement of the set goals, in particular achievement of targets in sales and profitability of the Company, ensuring the quality of corporate governance and, of course, bringing the service standards up to international standards, that does not rule out consideration of the question of receiving international rating.
- How do you assess Company’s activity since early 2017 and whether the set goals have been achieved?
- Over the past 9 months Atəşgah was able to collect 90% of the 2017 plan and this is a fairly good indicator. We’ll not rest on our laurels and are already working on the making of the budget and operating plan for 2018. Now the Company is actively working on the development of IT infrastructure. In particular, work is underway in order to improve the quality of services by applying modern technologies. Presently, Atəşgah carries out online sales on three products, including compulsory liability insurance of vehicle owners, compulsory insurance of real estate and insurance for those who travel abroad. In the future we are planning to increase their number. Among our plans are also to simplify access to information on claims management for clients. Relevant software has been developed and in under testing now. The new service will allow the customers to reduce the time spent on going to the Company and monitor the settlement process in e-form.
- Does the Company plan to change tariffs for its products?
- Atəşgah hasn’t such plans yet, but the prices will be dictated by the market. By the way, this is one of the nuances of the country’s insurance market, when setting of tariffs for products becomes problematic because of unsound competition waged by some players. There are companies that, despite the ban at the level of the insurance legislation, provide compensation on compulsory motor insurance, that is economically inexpedient and that leads to loss. Of course, it is difficult to compete under such conditions...
- Does Atəşgah have plans on purchase or merger with any company on the market?
- Now there is no such a necessity. Perhaps, that would be actual if it would be required to adopt any of the technology or raise a portfolio, but we don't need this.
- How do you assess Azerbaijan's insurance market today, and what are prospects for its development?
- The insurance market of Azerbaijan, despite the unstable economic situation, now has become not only stable, but even shows growth. In addition to the increase of indices I can also call appearance of new types of insurance, in particular compulsory kinds of insurance, on the market. There are types of insurance that are not developed in Azerbaijan, for example, financial risks, but that is linked with activities of insurance companies, mainly the lack of demand or weak development of the financial market. And such situation has formed not only with financial risks, but also with many other ones, where there is also a factor of both the absence of necessity and non-readiness or non-perception on the part of citizens. At that, the Azerbaijani economy continues to develop, and insurance is its part that corresponds to the existing market.In 2018, the insurance market of Azerbaijan will continue developing, but grave changes with the emergence of new participants or a product line are not expected. I think we’ll see revival of the market in a year.
- Does the current number of insurance companies conform to the existing requirements?
- No, there is still a lot of companies, and those companies that have failed for many years to occupy a relevant position in the insurance market and increase premiums should think about merging with other such companies – this is the most optimum alternative.
The main source of economic growth in Azerbaijan still is the oil and gas sector. Although the government has already focused on diversifying its economy in the recent years, the pandemic in combination with the oil price crash showed how fragile the economy still is.
The audit sector also supports these measures. Supporting the measures taken in the country, the Chamber of Auditors recommended member audit organizations and independent auditors to delay the execution of audit contracts as much as possible and to work remotely as appropriate in order to prevent the risk of coronavirus.
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