Caspian Energy CEO: How would you assess the present state and prospects of the insurance market development in Azerbaijan?
Aydin Rahmanov, Chairman of the Board of Standard Insurance: The prospects are rather big. The potential of the market has been covered by only 10-15%. There are big opportunities for intensive work with the population, representatives of the small and medium business, farmers, etc. The market is very broad and we have perspectives for growth by applying the experience of more developed countries.
CEO: But it seems like the insurance in Azerbaijan is becoming more mandatory, leaving the voluntary segment aside. Not all people like it. May the development of insurance cause some additional load on population?
Aydin Rahmanov: Thereare two ways for introduction of insurance in the public life: mandatory insurance and stimulation of financial interest of clients. But there is the third option making it possible to apply both mentioned methods simultaneously. It is exactly a mixed version we worked out for instilling the insurance culture. Besides, the process is wavy in character as mandatory and voluntary insurance prevail at certain stages. The thing is that within a short period of time we should run along the path that the foreign companies managed to cover within decades. Accordingly, a certain part of the process runs painfully. But if every person fulfills his mission and duties consciously and responsibly, believe me, we will be able to easily overcome all obstacles.
CEO: The attitude expressed toward insurers in the community is not positive actually. To all appearances there were people who did their job in irresponsible manner and caused damage to the image of the entire market. Which tools would you suggest to handle the situation?
Aydin Rahmanov: To fightand clean up the lines. It is necessary to enlighten people, inform them about advantages of insurance. It is not like there was no insurance culture existing in Azerbaijan. From the very beginning, right till the USSR and during a 70 year existence of the USSR, it has been perceived skeptically. Therefore, we started the insurance business from minus but not even zero. All the responsibility for the future of the market falls on the current insurers. Everything is based on their decency, skills and love to work. On the other hand, over the past months the state agencies raised an issue about increase of the number of complaints about insurance companies. In fact the 90% of the complaints were groundless. They proceeded only from the assumption that people take insurance with miscomprehension, distrust, bias and certain exaggerated expectations.
CEO: May it be associated with a high amount of players in the insurance market? There are a few leading companies while others, either for the lack of competence or funds, are the ballast that should probably be got rid of.
Aydin Rahmanov: Let us try to analyze the insurance market activity for the past three years and make an approx classification of companies. Let us skip the companies engaged in life insurance since it is a specific type of insurance which is associated with investment risks, and bears a long-term character. The rest companies find a place in the sun on their own. They are all floating free and if any of them wishes to merge, stop operation and abandon the business then it is a natural thing. Speaking namely about Standard Insurance, our philosophy is that a loyal, fair, right and qualitative client is heritage of any insurance company. We value clients whom we managed to attract. Perhaps, part of the insurance companies faced difficulties in recent years. But owing to instruments applied by the Ministry of Finance, everything set out on a path.
CEO: Which types ofinsurance are the most promising for near future?
Aydin Rahmanov: Considering the mentality and financial interest, property insurance has always been popular: automobiles, immovable property, values, etc. Medical insurance is attractive as well. The insurance of liability is promising as well. I mean voluntary types of insurance but not mandatory.
CEO: How did the devaluation of manat impact on the insurance market?
Aydin Rahmanov: The devaluationhas certainlyhad a negative impact on financial indicators of companies which
had foreign exchange liabilities towards reinsurers. In general, taking into account that we are players of the domestic market, we produce services, get and pay money, all of it happens inside of the country, so this is not to say that the devaluation hit us strongly within one day. But this negative impact will become stronger in the long term since the higher are the prices for services, for instance in auto-services, medical institutions, companies repairing institutions and etc., the higher will be our expenditures as we had received money before the devaluation. In other worlds, we assumed obligations relying on certain sums whereas now we will have to pay much higher prices. But there are advantages as well. This shock made all parties get involved in optimization of business doing. I would like to note that Standard Insurance lost no single client despite the devaluation and all the other factors.
CEO: Which types of insurances do clients often apply for?
Aydin Rahmanov: We have been active in the market of mandatory insurance, medical insurance and still stay on top of insurance of transport facilities. Accordingly, these are the types of insurances that clients mostly apply for. On average, we make payments for 400-500 appeals per month. It makes about 1 mln AZN.
CEO: Preparing for the interview with you, I read your discussion with the forum users that you had been holding since 2008, replying to the questions about insurance and activity of Standard Insurance. But you left this branch of the forum in December 2011. How do you trace the situation currently?
Aydin Rahmanov: We shifted the communication to the website. Clients have an opportunity to ask any questions which do not remain without answers. Apart from this, we have open doors day on Tuesdays and Fridays. In addition to this, every month we arrange open doors day in our regional offices.
CEO: How did it happen that you started working for Standard Insurance?
Aydin Rahmanov: I was born and grew up in Sahil settlement. In1996 I entered the AzerbaijaniUniversity of Architecture and Construction. In the same year I got a job at Zamin insurance agency. I worked for four years there. I started as an insurance agent, later I became an inspector and the final position was a sales manager.
I became a master student in 2000. New requirements to insurance companies appeared at that period and Zamin agency was closed. I occupied the position of the head of the department for sales development and agent network at MBASK insurance agency. I worked for 2 years there while I was studying for my master’s degree. Then I joined the army. After completing my military service, I started working for MostInsurance Company. Later, Most Insurance was renamed into Standard Insurance. So it is now 12 years that I have been working for this company. I assumed the position of the sales director. Then, I became a deputy general director. Later, Standard Insurance became a joint-stock company and I was appointed the first Deputy Chairman of the Board. A year ago I became a chairman of the board.
CEO: Did you manage to spare time for personal life with such a hot working schedule?
Aydin Rahmanov: I am married and I have three children. My elder daughter is 5 years old and the twin boys are two years old.