Diversifying from a stable base

As the only reinsurer in Azerbaijan, AzRe is instrumental in many of the risk transfer mechanisms in its domestic market, but it is also diversifying into new markets as Fuad Kuliyev, chairman of the management board of AzRe, explains to Baden-Baden Today.

What has AzRe achieved since our interview last year?

We have had another successful year, with a combined ratio of 74 percent despite the setbacks of devaluation caused by the collapsing oil price. We have also diversified our portfolio both domestically and abroad by broadening our horizons to nearby markets such as Iran, Turkey, and Georgia, and to other regional reinsurers with whom we have a similar outlook.

There is no compulsory cession but we have a market share of about 40 percent of all reinsurance in Azerbaijan which we service with our asset base of more than $85 million.

How do you see the development of business in your region?

It has slowed down but market penetration is low so there remains a lot of potential and there are a number of important corporates who are inadequately covered. We are instrumental in developing the Azerbaijan Catastrophe Pool and Green Card Bureau, and hosting the Azerbaijan International Insurance Forum, and we are creating capacity for local sectors such as agriculture and life products through our group direct insurance companies.

Construction in our cities continues apace and to follow the success of the Baku European Games in 2015, our Baku City Circuit held the European F1 Grand Prix this year, so there is a lot going on in our country and that needs coverage. We are very optimistic.

What are your expectations for this year at Baden-Baden, given current pricing levels?

As before, we want to raise our profile with our selected clients and brokers. We understand the business and would rather concentrate mainly on our nearby markets where results are better, interest rates are higher and where we feel at home, as can be seen from our results and where we have the leading position.

We are one of the hosts of the Baden-Baden Azeri Evening which is well attended and with our B+ (stable) rating from AM Best, equity, abilities and decent ratios we believe that we can continue to diversify our business slowly, carefully and in areas that we know well. We are hoping for some good conversations.

Fuad Kuliyev is chairman of the management board of AzRe. The AzRe team can be contacted at: isamsonov@azre.az