Current state of Azerbaijan Life Insurance market trends

Current state of Azerbaijan Life Insurance market, trends and perspectives IV Azerbaijan International Insurance Forum - AIIF 20 -21 June, 2013 Baku, “Jumeirah Bilgah Beach Hotel”

Life Insurance companies of Azerbaijan Since March, 2008, due to new legislation in insurance, all insurers should operate only in life or non-life (general insurance) insurance. The life insurance companies licensed from: PASHA Life - February, 2011 Ateshgah Life - 2009 Qala Life - November, 2010

Life Insurance products Mainly offered life insurance products in the local market: - Compulsory life insurance (Law of Azerbaijan Republic on compulsory insurance in case of professional disability as a result of industrial accidents and professional diseases) - Term life Insurance - Endowment life Insurance - Critical diseases - Key men life insurance - Borrowers life insurance

Life Insurance market of Azerbaijan Insurance premium (2012) Insurers Total premium (USD) Annual growth (%) Market share (%) PASHA Life 18, 729 79, 60 4, 30 Ateshgah Life 20, 081 65, 45 4, 60 Qala Life 8, 086 33, 53 1, 86 Total Life Insurance 46, 896 59, 53 10, 75 Total Insurance market 436, 498 100

Structure of Life Insurance collection in Azerbaijan (2012) Total collected premiums – 46, 896 mln. USD Compulsory life insurance – 27, 653 mln. USD Voluntary life insurance – 19, 243 mln. USD As a percentage of GDP - 0, 07 %

Life Insurance market of Azerbaijan Claims paid (2012) Insurers Claims paid (millions USD) Annual growth Market share (%) of claims paid (%) PASHA Life 0, 460 98, 90 0, 38 Ateshgah Life 4, 741 22 times 3, 96 Qala life 0, 18 234, 88 0, 15 Total: 5, 381 11 times 4, 50

Insurance market of Azerbaijan Total collected premium (January-May 2013) Life insurance - 41, 888 millions USD None life insurance - 173, 117 millions USD Total - 215, 005 millions USD

Life Insurance market of Azerbaijan Insurance premium (January – May, 2013) Insurers Total premium (million USD) Annual growth (%) Market share (%) PASHA Life 18, 942 83, 46 8, 81 Ateshgah Life 16, 273 38, 36 7, 57 Qala Life 6, 673 58, 71 3, 10 Total life insurance 41, 888 60, 18 19, 48 Total insurance market 215, 005 16, 58 100

Share capital value of Life Insurance companies of Azerbaijan (01 June, 2013) Insurers Value of share capital (millions AZN) Value of share capital (millions USD) PASHA Life 25, 200 32, 118 Ateshgah Life 4, 000 5, 098 Qala Life 5, 005 6, 379

Share capital value of Life Insurance companies of Azerbaijan Market share of Life Insurance companies in share capital 0, 00% 14, 63% PASHA Life Ateshgah Life Qala Life 11, 69% 73, 67%

Global Insurance Market in 2011 According to the Swiss Re report, Total insurance premiums collected – 4, 6 trln. USD Percentage share of global GDP– 6, 6% Global Life Insurance premium collected– 2, 62 trln. USD The share of total insurance premium collected by the Life Insurance- 57% The share of Life Insurance GDP in developed countries - 4 -7%

GDP figures of Caucasus states (2012) Country Value of GDP (millions of USD) The position number in the list - Azerbaijan 68, 804 66 - Georgia 15, 934 113 - Armenia 10, 066 131 - World 71, 707, 302 - - Source: Wikipedia, list by International Monetary Fund

Gross Domestic Product (2012) - Azerbaijan The share of GDP per capital (per person)– 7490 USD The average monthly salary– 494 USD Developed countries The share of GDP per capital (per person) – 40000100000 USD - Approximate average monthly salary – 2000 -6000 USD

Life insurance cost in different countries (per year) According to “Allianz” report; German citizen – 1042 Euro U. S. citizen – 1270 Euro Japanese citizen – 2183 Euro Azerbaijani citizen – 4 Euro

Factors that may contribute to the development of life insurance Development of new profitable voluntary insurance products Strengthening of marketing activities by insurance companies Strengthening of the population educating process about insurance products The launch of various projects promoting insurance in media and etc. The establishment of training centers for the insurance professionals preparation.

The real growth potential of life insurance market of Azerbaijan The total life insurance market might grow 400 -500% within next 3 years due to: - Bank assurance, new business companies, none oil sector of economy and etc. Voluntary life insurance products might grow 300% within next 3 years due to: - Mainly, potential customers are financial institutions (commercial banks, insurance, leasing companies and etc. ), state organizations, other business structures

Thanks!!! We are looking forward to see you in the “traditional Azeri evening” party tomorrow 21 June 2013, at 8: 00 pm organized by “PASHA Life Insurance” OJSC!