Azerbaijani insurance companies can compete with foreign companies in the domestic market, according to the Azerbaijani Finance Minister Samir Sharifov.
Azerbaijani insurance market is open, and foreign companies may enter the market, he said.
"Our insurance companies have already gained enough experience and have qualified specialists, and therefore they are able to compete with foreign companies in the domestic market," the minister said.
The limit for participation of foreign capital in the insurance market of Azerbaijan will be liquidated completely in 2017.
In accordance with the decision of the finance ministry, the relevant additions have been made to the rules of share accounting and determination of maximum limit for the participation of the foreign capital in the volume of authorized capitals of the insurance companies in Azerbaijan. The texts of the additions were published on the website of the Ministry of Economy.
At present, the share of foreign capital in the Azerbaijani insurance market does not exceed 10 percent, and limit of the foreign capital participation in the total authorized capital of insurers was 30 percent.
Under the amendments, the limit will be held at the level of 50 percent until January 1, 2015, and will increase to 70 percent in 2015, to 85 percent - from January 1, 2016, and to 100 percent as of January 1, 2017.
At the same time, from now on foreign individuals and legal entities will have access to the market, while foreign insurers have had this right so far.
It should be noted that, prior to 2008 the share of foreign capital could not exceed 49 percent from the capital of a company. However, after the entry into force of the law "On insurance activity" in March of the same year, the limit applies to the total capital of the entire insurance market. This means that restrictions on the establishment of a company with 100 percent of foreign capital have been eliminated. Exhaustion of quota can be a real lever of influence on foreign access to the market.
As a result of the liberalization of the insurance market in the country after a five years pause, in 2010, the world's largest insurers went "on an active attack." Apparently, during this period foreign insurers only started in the Azerbaijani market. Incentive for joining Azerbaijan could also be the stable economic and political situation in the country, as well as great potential for the development of the insurance business.
At present, there are 28 insurance companies in Azerbaijan in five of which present foreign capital. AIG Insurance (now Chartis), AXA, Miracle Insurance and Financial Group, Basak, Glencarron Group Limited are among the largest international players in the market.
Also Slovenian Sava Re reinsurance company, German Munich Re insurance company, the Russian "ROSGOSTRAH"JSC, "ROSNO" JSC and others are also showed interested in the Azerbaijani market.