Interview: Fuad Kuliyev, Az Re


A familiar hand


Fuad Kuliyev, CEO, Az Re, talks to Baden-Baden Today about the reinsurer’s plans to grow its local market and enter new, yet similar, geographies


shareholders, is set on growing the local market and continuing to support the region’s economy. Fuad Kuliyev, CEO, Az Re, says that despite the local market being small, it is growing and adds that the reinsurer wants its brokers and retrocessionnaires to listen to the company’s plans while here in Baden-Baden. “We know that


A current conditions are


pretty bad and actually expect to get less out of our meetings in Baden-Baden than we put in,” he says. “However times will change and we would like our producing brokers and retrocessionnaires to listen carefully about our plans to develop slowly into similar markets and countries as our own.” Kuliyev adds that with a surplus of the


equivalent of $64 million and gross premiums written at $46 million, more than 95 percent of which are domestically sourced and returned a combined ratio of under 70 percent over the


Z Re, a privately owned reinsurer established in Azerbaijan in 2007 by six


past three years, Az Re has a market share of 50 percent of all reinsurance premiums from its market. The reinsurer was also assigned a rating of B+(stable) by AM Best in 2014. “Our main purpose is to provide support to our local market which is growing but still small and so needs local assistance for local problems. In addition, we


play a role through our


earthquake pool in de-risking and supporting the economy,” he says. “Of course we also write business and


aim to develop our international business in nearby markets; primarily we are a market for facultative business.” Kuliyev adds that despite the company’s enthusiasm to share its intentions, the fall in the price of oil affects certain parts of the economy. “Despite the oil price, we still see an increase in the market and our own position is strong with nearly 20 percent of our assets in foreign currency; we are also very liquid with 75 percent of our assets in cash,” he explains.


Fuad Kuliyev “The reinsurance market is less of a


challenge to us as, unlike other reinsurers, we are not reliant on the international markets for our existence and are not under pressure to grow.” n


Fuad Kuliyev is the CEO at Az Re. He can be contacted at: fkuliyev@azre.az


Bermuda players ‘forced to seek new risks’: ABIR T


he influx of new capital that has entered the reinsurance industry in recent years has


forced Bermuda’s players to reassess how and where they put their capital to work and seek new opportunities and new risks, Brad Kading, president of the Association of Bermuda Insurers and Reinsurers (ABIR), told Baden-Baden Today. He said the association’s members are being


compelled to seek new opportunities but he also stressed that the consolidation sweeping the industry is also relatively normal and part of the industry’s cyclical nature. “The new $70 billion in capital forces us to


think of new markets so we can put that capital to work,” Kading said. “Our efforts are directed towards moving risk out of government funds into the private market; closing the ‘protection gap’; and developing new products like cyber to be relevant to consumer needs. “There have been seven mergers or acquisitions within the ABIR membership in


Brad Kading


the last three years. At the same time, though, we’ve had five new re/insurers created in Bermuda and there are trade press reports about four more in the works. We’re going through the normal cycle of consolidation and incubation.”


14 | BADEN-BADEN TODAY | DAY 1: Monday October 19 2015


19.10.15 MONDAY


In terms of the main talking points at Baden-Baden this year, Kading said he expects the “same give and take as participants jockey for position to get the best deal”. He also noted the significance of the recent


hearing by the US IRS/Treasury on proposed regulations aimed at


preventing hedge


funds from avoiding taxes. Following a September 18 hearing, the


ABIR had reason to believe another version of the regulation may be published by year end, probably with the opportunity for additional consultation on the ‘bright line’ test and facts and circumstances issues. “Congress continues to put pressure on


Treasury to act. If an international tax bill gains traction in Congress we expect the passive foreign investment company (PFIC) issue will be part of that legislation. We’re also talking to key Congressional staff this week on the matter,” he said. n


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