Project overview
Compulsory Insurance Bureau (CIB) is an information center for all participant insurance companies in compulsory type of insurance in the Republic of Azerbaijan. It has a system (project) called İSBİS (CIBIS), which consists of two layers: sales and claims. The project focuses on the digitalization of insurance products and integration with relevant state entities. The following products are included within the scope of İSBİS:
- Compulsory insurance for real estate (DƏİS or CIRE)
- Compulsory insurance for civil liability related to the operation of real estate (DƏİMMS or CICLORE)
- Compulsory insurance for civil liability of motor vehicle owners (AVSMMİS or CICLMVO)
- Compulsory personal accident insurance for passengers
- Compulsory insurance against the loss of professional labor capacity due to industrial accidents and occupational diseases
These products can be classified according to the government entities with which they have been integrated. For the first product, DƏİS, data about the insured real estate is obtained from the State Service on Property Issues under the Ministry of Economy. Based on this data, properties are automatically included in the compulsory insurance process. The same principle applies to the product, DƏİMMS. Additionally, integration with the Ministry of Justice allows the system to verify whether the property belongs to the individual in question, based on the power of attorney.
The third product, AVSMMİS, has undergone a digitalization process along with integration with the Ministry of Internal Affairs and the Ministry of Taxes, putting line between physical and legal persons. Customers or insurance agents can access a dedicated platform to register for new policies and check the status of existing contracts. By virtue of integration with the Ministry of Justice it is possible to check whether the motor vehicle belongs to the individual in question, based on the power of attorney. Similarly, we have implemented a control mechanism that integrates with the Ministry of Internal Affairs to identify uninsured vehicles. AVSMMİS is divided into three types: standard, frontier and Green Card (international). Given that Green Card holders can travel throughout Europe, the associated risk rates are significantly higher than for local insurance contracts. To address this, we have created a pool mechanism where all income from sales is collected into a pool and periodically distributed among insurers based on their sales shares from the previous year. The pool applies to the frontier insurance as well. In this approach, claims are settled by addressing the common pool, thus, both the risk and the profits are shared among the insurance companies.
Furthermore, as a Compulsory Insurance Bureau, we have taken over the control of the compulsory personal accident insurance for passengers and compulsory insurance against the loss of professional labor capacity due to industrial accidents and occupational diseases. Through the integration with the Ministry of Labour and Social Protection of Population we are able to identify uninsured workers.
When it comes to the technical details, everyone can create a profile and register for a new insurance policy on the websites of the insurance companies, which is backed by our system. Once the customer applies for a new insurance contract he/she receives a payment code that must be used to make a payment within 48 hours; otherwise, the system cancels the insurance policy automatically. These operations are conducted through the website of the Compulsory Insurance Bureau. If the operator is an insurance agent, they can perform these tasks directly, while individual customers wishing to purchase a policy online can do so through an iframe. We have provided all member insurance companies with API addresses, enabling citizens to purchase insurance contracts through their websites. We have mutual integration with insurance companies that we give them interface and data. Notably, our system automatically prevents duplication; if a person already has a compulsory insurance policy, the system will not allow them to register for a second one, regardless of the insurance company.
Having described the sales layer of the İSBİS project, let us now explain how the claims layer works. In addition to classic claim handling, we have introduced a new approach to the insurance sector called Direct Claim Management. In this model, if two motor vehicles are involved in an accident, the injured party’s insurer compensates for the consequential damage instead of the insurer of the responsible vehicle. The amount paid is later reclaimed from the insurer of the liable vehicle. To avoid conflicts between insurers regarding the compensation amount for the injured party, we utilize the Lotus method. Once in a month, a lottery system automatically collects money from debtors and distributes it among creditors, with amounts determined by the system. Due to the risk of lower reimbursement, insurers are incentivized to pay their injured insureds non-aggregated compensations.
Finally, it would worthy to note that by virtue of these digitalization projects, in the Republic of Azerbaijan, the penetration rate in the insurance sector has increased significantly.
Success story
The success story of CIB in the realm of Information Technology is a testament to innovation, strategic vision, and unwavering commitment to excellence. A key pillar of CIB’s success lies in its holistic approach to IT integration. Instead of viewing technology in isolation, the Bureau adopted a comprehensive strategy that integrated various facets of its operations. This included the integration of enterprise resource planning (ERP) systems, customer relationship management (CRM) platforms, and other mission-critical applications, creating a unified and interconnected digital ecosystem.
CIB information system has been developed in accordance with the provisions of the Law with the purpose of:
- acting as a centralized database of insured persons, vehicles and properties.
- automatic issuance and registry of policies.
- providing a platform for Bonus-Malus calculation and associated premiums.
- maintaining smooth and consistent handling of claims via the centralized Claim Handling System.
- serving as a (SMS, email) notification system (pending /paid/ terminated / expired policies, claim registration/payment);
- facilitating statistics and reporting data;
- Focus on the digitalization of insurance products and integration with relevant state entities.