Fitch explains impact of manat devaluation on insurance sector

  14 March 2016    Read: 1057
Fitch explains impact of manat devaluation on insurance sector
The insurance sector is impacted by the manat devaluation of 30% in February 2015 and a further 50% in December 2015.
The devaluation has led to the upward revision of insurance liabilities related to FX-denominated commercial risks. The devaluation is also likely to put pressure on the profitability of new policies.

Given the low capacity of the local insurance sector and its high dependence on outwards reinsurance purchased abroad, it may be difficult to pass the increased costs of outwards reinsurance to local commercial policyholders in full. And, this will have negative impact on the insurance market.

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