Azerbaijan's insurance companies can undertake risk reinsurance for Iranian companies, expert says

/By Azernews/

By Aynur Karimova

Azerbaijan's insurance companies can take upon the reinsurance of risks of Iranian insurance companies, expert in the field of insurance Khayal Mammadkhanli believes.

The President of Training and Consulting Center Consultant told Trend that Azerbaijan's insurance companies are not so big to take a rightful place in the Iranian market and to collect a large portfolio in a short time.

"Azerbaijani companies can also insure the cargo transportation and the growing goods' turnover between the two countries," he said, adding that several Azerbaijani insurance companies have already showed interest in the cooperation with Iranian companies.

"I know that the representatives of several insurance companies of Azerbaijan have visited Iran and suggested the Iranian insurance companies their reinsurance services, both in the face of the insurance companies and brokers," the expert noted.

Mammadkhanli believes that another opportunity for the development of relations between the Azerbaijani and Iranian insurance companies is the fact that the Iranian companies lack international connections due to the long lasting international sanctions.

"Currently, a large part of the Iranian market accounts for four large insurance companies. Despite the fact that Iran's domestic insurance market is very developed, Iran's companies have no relations with the world's major insurance and reinsurance companies because of the different sanctions and embargo. This is a very good opportunity for expansion of relations between the insurance companies of the two countries," he stressed.

There are 27 insurance and 2 reinsurance companies in Iran. Some 25 insurance and one reinsurance company operate in the insurance market of Azerbaijan.

Previously, a joint Azerbaijani-Iranian Insurance Company Azer-Asia operated in Iran, but it was closed in 2008 due to the refusal of the Ministry of Finance of Azerbaijan to extend its license. The company operated on the Azerbaijani insurance market since 1997.

Today, 164 foreign insurance and reinsurance companies and 80 insurance brokers are working with Azerbaijani insurance companies, through which the country's companies carry out insurance, reinsurance and brokerage operations.

Commenting on the possibility of entering of Iranian insurance companies to the Azerbaijani market, Mammadkhanli said that this is not a pressing issue.

He said despite the reality of such a possibility and interest of the Iranian companies in the Azerbaijani market, it will not bring a significant growth to the market.

Noting the steps of the Azerbaijani government taken for improving the investment climate in the country and encouraging the establishment of joint ventures, Mammadkhanli said that establishment of joint Azerbaijani-Iranian insurance companies could help Azerbaijan's insurance market only in financial terms.

"Direct access of the Iranian insurance companies to the Azerbaijani market will not bring any new technologies or significant growth," the expert noted.

Mammadkhanli believes that Iranian insurance companies' entering the Azerbaijani market will be useful in terms of making Iranian investments in this sector.

"The emergence of Iranian insurance companies on Azerbaijani insurance market will be helpful in terms of making Iranian investments in the sector, as well create opportunities for the activities of Azerbaijani insurance companies in Iran," he said earlier.

He also noted that there are several insurance companies in Azerbaijan that are in a difficult situation. It would be great if the Iranian insurance companies that want to start operating in Azerbaijan acquired these companies and invested in them.