AIG Decided to Postpone Leaving Azerbaijan

The sale of the subsidiary of the American insurance company AIG, Chartis Azerbaijan, has been suspended, a customer of the company said, noting that the process has been suspended due to the devaluation of the manat.

Negotiations for the sale of shares of the company began in June 2014. By this time the company had virtually halted activities in Azerbaijan. This decision was motivated by the AIG strategy to be present only in developed markets.

The sources did not rule out that the company can resume its work in connection with the change of present-day conditions after the current fall in prices on global markets and the devaluation of the manat. Optimistic experts told Turan that the government of Azerbaijan in the new conditions could reduce protectionism not only in the insurance market. It is also expected to enact new policies to attract foreign investment to the non-oil sector, which will require insurance protection at a high level, for example in the face of AIG, which insures property of 70 million customers around the world and allows them to manage virtually any risk with confidence.

Chartis Azerbaijan, a wholly foreign insurance company, appeared in Azerbaijan on the background of the oil boom and insured the risks of the largest investors. It was re-registered at the Ministry of Justice on October 15, 2010, replacing the legal status from LLC to JSC. In the process of changing the legal status and renaming the company also officially registered 100 per cent foreign investment.

In recent years, the insurance market of Azerbaijan is more and more consolidated in the hands of 5-6 insurance companies related to the leadership of the country. They are Pasha Sigorta, Ateshgah Sigorta, Pasha Hayat Sigorta, Ipek Yolu Sigorta, Atesgah Hayat Sigorta, Azsigorta and others.

Azerbaijan’s insurance market is underdeveloped - the volume is 350 million. Relative to GDP, it is only 0.6%, which is very low. For example, in the US the figure is 11%, and in Ireland - 24%. In this sense, the action of AIG is understandable.

It should be noted that after the announcement of China's policy of "open doors" in 1978 and the subsequent creation of free economic zones, AIG was the only privileged foreign company in China with 100% foreign capital. It insured the risks of foreign investors and became the guarantor of the security of the capital, which led to the investment boom and the rise of China's economy to a high international level. -0-