1. Current CMTPL Market in Azerbaijan and expectations for the next years
AIIF VI Azerbaijan International Insurance Forum
Compulsory Insurance Bureau of Azerbaijan

2. GENERAL INFORMATION Republic of Azerbaijan Capital: Baku Territory:
86,000 square kilometers
Neighbor Countries:
Turkey, Russia, Iran, Georgia, Armenia and Turkmenistan over Caspian sea
Population:
9,5 million people *
Roadways:
59 thousand kilometers
Total number of registered motor vehicles:
1,245,000 **
Total number of road traffic accidents:
2,846 **
Total number of road traffic death:
1,164**
Total number of road traffic injuries :
2,948**
* According to the statistics of 2014
** According to the statistics of 2013
The State Statistical Committee of the Republic of Azerbaijan
CIB

3. BRIEF INFORMATION ABOUT CIB
According to the applicable legislation of Azerbaijan, with respect to CMTPL, CIB is a:
MOTOR BUREAU
COMPENSATION BODY
GUARANTEE FUND
INFORMATION SYSTEM
GREEN CARD BUREAU
CIB has been accepted to the Green Card System as a Transitional Member effective January 1st 2016.
Currently, CIB consists of 15 participant insurers, 11 of which are eligible to run CMTPL.
CIB

4. Average CMTPL premium: 75.88 AZN Average CMTPL premium: 76.06 AZN
COMPARATIVE STATISTICS ON CMTPL AND CASCO DURING 2013 AND 2014
Type of insurance
Number of CMTPL
insurance policies
Comparison
Amount of CMTPL
insurance premiums
2013
2014
CMTPL
911,909
931,464
2.1% up
69,367,582
70,687,551
1,9% up
CASCO
56,859,150
37,837,615
33% down
2014
Average CMTPL premium: AZN
2015
Average CMTPL premium: AZN
CIB

5. Average CMTPL premium: 67.85 AZN Average CMTPL premium: 75.78 AZN
COMPARATIVE STATISTICS ON CMTPL AND CASCO DURING 5 MONTHS OF 2014 AND 2015
Type of insurance
Number of CMTPL
insurance policies
Comparison
Amount of CMTPL
insurance premiums
Comarison
2014
2015
CMTPL
370,215
397,210
7,2% Up
25,122,016
30,103,231
19,8% Up
Casco
14,351,447
12,923,652
9,9% Down
2014
Average CMTPL premium: AZN
2015
Average CMTPL premium: AZN
CIB

6. THE PROBABLE REASONS OF DECREASE IN CASCO
Devaluation of AZN – On 21st February 2015 the value of AZN against USD has devaluated about 34%. The new rate of AZN/USD has been set at 1 AZN = 1,05 USD
Bank loans – Starting 2014, restrictions in bank loans were observed which affected decrease in the volume of Casco sales. Reduction of motor vehicles sales via Banking loans resulted in the overall reduction of Casco sale volume in 2014 onwards.
Implementation of Euro 4 standards – Since 1st April new Euro 4 environmental standards regarding emission of noxious substances were applied. As a result of this regulatory change – the volumes of motor vehicles imported into Azerbaijan went down by nearly 50%.
CIB

7. Type of uninsured persons
THE PROBABLE REASONS OF INCREASE IN CMTPL
Amendments made to the Administrative Code of Azerbaijan Republic in 2014
Type of uninsured persons
Before
Now
Physical person
10 AZN
50 AZN
Entrepreneur
60 AZN
100 AZN
Legal person
150 AZN
300 AZN
The practice of some countries on penalties for uninsured driving:
The United Kingdom: up to 5000 GBP
France: 3750 EURO
Kazakhstan: 200 USD
Turkey: 5% of insurance premium per each month
CIB
Compulsory Insurance Bureau of Azerbaijan

8. COVERAGE DEGREE OF CMTPL IN 2014
Despite the increase in the volume of CMTPL, only 55% of total number of vehicles registered in Azerbaijan were covered by CMTPL in 2014
Such percentage rate intensifies risks such as increasing volume of payments made through Guarantee Fund and has an immediate effect on participant insurers’ profitability.
Total number of registered motor vehicles in Azerbaijan as of 2014: 1,245,000
Total number insured vehicles registered in Azerbaijan: 700,658
Unfortunately, CIB has no information on percentage of vehicles that are currently
in use as opposed to those, permanently out-of-use
CIB

9. Compulsory Insurance Bureau of Azerbaijan
THE REASONS OF SMALL COVERAGE DEGREE IN CMTPL
The small coverage percentage in CMTPL is affected by the following:
Unawareness of motor vehicle owners
Low lever of public trust towards insurance companies
Negligence of motor vehicle owners
Relatively smaller fine rates for uninsured driving
CIB
Compulsory Insurance Bureau of Azerbaijan

10. 2014 2013 COMPARATIVE STATISTICS ON INSURANCE PAYMENTS
CLAIM STATISTICS
Vehicle damages
Property
damages
Health injury
Death of a person
TOTAL
Number of claims
19,284
560
625
280
20,749
Payments (AZN)
23,910,000
779,000
787,000
1,357,000
26,833,000
Compared to 2013, the number of insurance claims has increased by 12.5% and there has been
5.9% increase in insurance claim payments.
IN COMPARISON to 2013
26,833,000 AZN
2014
5.9 %
25,330,180 AZN
2013
CIB

11. COMPARATIVE STATISTICS ON INSURANCE PAYMENTS
January - May 2015
Caused to the motor vehicles
Caused to the properties
Caused to the health
Death
Total
Number
Amount (AZN)
7,543
8,500,808
225
333,030
238
294,000
108
540,000
8,114
9,667,838
January - May 2014
Caused to the motor vehicles
Caused to the properties
Caused to the health
Death
Total
Number
Amount (AZN)
7,884
9,740,935
274
362,283
297
369,500
136
646,288
8,591
11,119,006
CIB

12. COMPARATIVE STATISTICS ON COMPENSATION PAYMENTS MADE BY CIB

13. THE INFORMATION SYSTEM OF CIB
Centralized CMTPL Policy Issue & Registry System
Automatic issue and registry of CMTPL policies
SMS notification system
Automatic system of Bonus-Malus calculation and associated premiums
Centralized database of insured persons and vehicles
Centralized Claim Handling System
The system enforces workflows and procedures claim manager must comply with according to the law of claim handling process;
Each stage of claim handling and settlement process is registered in centralized CIB database for claims which ensures proper tracking history in case dispute requires escalation to court case for further investigation;
At each stage of the claim handling process all the parties involved receive either SMS or notification regarding the update on the claim status.
Centralized system is a critical tool as Bureau provides useful statistics to insurance companies, CIB and Ministry of Finance;
The system is also integrated with localized mapping system where exact geolocation of the accident can be determined.
CIB

14. THE RECENT AMANDMENTS MADE TO THE CMTPL LEGISLATION
The following amendments to the Law of Azerbaijan Republic “On compulsory insurances”
Have been applied on 28 November 2014:
acceptance of Azerbaijan to the Green Card System and relevant requirements;
Subdivision of general CMTPL into more specific standard insurance, border insurance and Green card;
Reduction of insurance payments respective to the third party’s guilt degree;
Compensation payment made for insurance accident caused by a stolen motor vehicle.
CIB

15. ACCEPTANCE OF AZERBAIJAN TO THE GREEN CARD SYSTEM
The acceptance of Azerbaijan Republic to the Green Card system was approved on 28 May 2015 by the General Assembly of the Council of Bureaux which was held in Sopot, Poland.
The Bureau of Azerbaijan was accepted as a Transitional Member with effect from
January 1st 2016.
CIB

16. ACCEPTANCE OF AZERBAIJAN TO THE GREEN CARD SYSTEM
Number of vehicles registered in Green Card member countries that have received Azerbaijan border insurance in 2014
IN COMPARISON to 2013
1 % up
8 % down
CIB

17. THE NEXT 2 YEARS - EXPECTATIONS AND TASKS
Building trust and promoting awareness of CMTPL insurance business in Azerbaijan
Implementation of online CMTPL sales avoiding printing paper policies;
Implementation of damage assessment software - Audatex
Implementation of Direct Claim Handling System and development of “Clearing settlement System”;
Developing & Introducing proposals for amendment to the legislation regarding insurance fraud detection;
Implementation of e-signature or Asan Imza integration to the Information System of CIB;
Integration of the CIB Information System to the State Motor Registry;
Changes to the CMTPL legislation regarding uninsured driving and increase of CMTPL coverage market penetration;
Implementation of damage assessment standards and CMTPL Loss-Assessor Certifications system;
Implementation of Telematics;
Insured amount limits increase;
CMTPL Mobile Application development
CIB

18. MOBILE APPLICATION FOR CMTPL MARKET
CIB

19. Thank You
AIIF VI Azerbaijan International Insurance Forum