REINSURANCE NEEDS OF AZERBAIJAN INSURANCE MARKET: DEMAND, SUPPLY AND CURRENT STATE

Tural Aliyev, 19.06.2014, Baku

• Azerbaijan Insurance Market is the biggest insurance market in South Caucasus

• (Figures in Million Euro):

• Azerbaijan is the most diversified in terms of types of business lines and products

• The biggest consumer of reinsurance • The greatest insurance market for capitalization

AZERBAIJAN INSURANCE MARKET POSITION IN SOUTH CAUCASUS REGION

376,3259 %

197,21 31 %

63,8610 %

AzerbaijanGeorgiaArmenia

AZERBAIJAN REINSURANCE MARKET PARTICIPANTS

• 1 local reinsurance company• 10 local insurers with effective license for

reinsurance supply• More than 100 foreign insurance and

reinsurance companies with approximately 150 branches registered in Insurance Supervisory for reinsurance activity in our Azerbaijan market

• 60 foreign reinsurance brokers

BREAKDOWN OF REINSURANCE PREMIUMS CEDED

45 814 015,6740,4 %

67 544 253,2659,6%

2013 Reinsurance Premiums Ceded: Local vs Foreign Reinsurers

LocalForeign

Local 45 814 015,67

Foreign

67 544 253,26

BREAKDOWN OF REINSURANCE PREMIUMS CEDED

2012 20130

20000000

40000000

60000000

80000000

100000000

120000000

38735268.445814015.67

50,840,225.66

67,544,253.26

ForeignLocal

Market/Year 2012 2013Local 38 735 268,4 45 814 015,67

Foreign 50 840 225,66 67 544 253,26

BREAKDOWN OF REINSURANCE PREMIUMS CEDED BY COUNTRIES

Premiums for 2013 (in AZN)

Azerbaijan

Russia

Turkey

Kazakhistan

USA

Europe

Other

Country Premiums for 2013 (AZN) Share

Azerbaijan 45 814 015,67 40,42%Russia 7 784 607,77 6,87%Turkey 3 223 891,12 2,84%

Kazakhistan 4 901 982,45 4,32%USA 1 214 795,59 1,07%

Europe 50 390 155,22 44,45%Other 28 821,11 0,03%

BREAKDOWN OF REINSURANCE PREMIUMS CEDED BY COUNTRIES

Azerbaijan Russia Turkey Kazakhistan USA Europe Other0.00

10,000,000.00

20,000,000.00

30,000,000.00

40,000,000.00

50,000,000.00

60,000,000.00

Premiums for 2013 (AZN)

Premiums for 2013 (AZN)

BREAKDOWN OF REINSURANCE PREMIUMS CEDED BY COUNTRIES

Country Premiums for 2012 (AZN)

Premiums for 2013 (AZN)

Growth rate

Azerbaijan 38 735 268,40 45 814 015,67 18,27%Russia 7 214 971,35 7 784 607,77 7,90%Turkey 2 723 194,47 3 223 891,12 18,39%

Kazakhistan 1 425 918,73 4 901 982,45 243,78%USA 1 392 570,47 1 214 795,59 -12,77%

Europe 36 966 477,92 50 390 155,22 36,31%Other 1 117 092,72 28 821,11 -97,42%

BREAKDOWN OF REINSURANCE PREMIUMS CEDED BY RATING

 Rating 2012 Share 2013 Share Growth rate

A 35 395 477,58 39,5% 46 586

801,08 41,1% 31,6%

B 8 009 762,60 8,9% 10 538 827,71 9,3% 31,6%

C and below

46 170 253,88 51,5% 56 232

640,14 49,6% 21,8%

Total 89 575 494,06

100,0%

113 358 268,93

100,0% 26,6%

C and below group includes local insurers and reinsurers as well.

BREAKDOWN OF REINSURANCE PREMIUMS CEDED BY RATING

46,586,801.08

10,538,827.71

56,232,640.14

Reinsurance premiums for 2013

A B C and below

BREAKDOWN OF REINSURANCE PREMIUMS CEDED BY LINES OF BUSINESS FOR 2013

Type of insurance total Local foreignProperty, Energy and Construction 35 530 828,1 4 753 213,99 30 777 614,11

Motor 20 110 253,34

11 375 087,52 8 735 165,82

Aviation 12 219 298,81 754 963,46 11 464 335,35

Health Insurance 3 128 352,8 1 986 098,52 1 142 254,28Liability 4 839 901,03 1 290 317,19 3 549 583,84Marine, Marine Liablity and Cargo 4 527 653,69 680 564,34 3 847 089,35Compulsory and Volunatary PA and Sickness 6 522 616,26 2 068 257,12 4 454 359,14Others 1 956 744,61 1 114 789,22 841 955,39

Figures above don’t contain personal insurances including compulsory PA insurance of military and police and other law enforcement overnment agency employees

BREAKDOWN OF REINSURANCE PREMIUMS CEDED BY LINES OF BUSINESS

Propert

y, En

ergy a

nd Constructi

onMotor

Aviation

Health In

surance

Liabilit

y

Marine, M

arine L

iablity

and Carg

o

Compulsory

and Volunata

ry PA an

d Sickn

ess

Others0

5000000

10000000

15000000

20000000

25000000

30000000

35000000

40000000

totallocalforeign

Thank You