Turkey's Directorate General of Insurance (GDI) has signed a memorandum of understanding with the Afghanistan General Directorate of Insurance Affairs (GDIA) to assist Afghanistan in developing its insurance sector.
Mr Mosa Kamawi, the head of Afghanistan Insurance Affairs, told Khaama Press that the MOU covers the exchange of information and cooperation in the field of insurance regulation and supervision.
“The MOU signed on 16 January is valid for three years aiming (for Afghanistan) to receive technical and advisory assistance from Turkey to help us with sharing information, experience and capacity building,” Mr Kamawi said.
Turkey’s cooperation will also assist Afghanistan with new investment facilities and development of the country’s insurance market, he added.
Insurance is one of the least developed industries in Afghanistan. Certain lines of insurance which are compulsory elsewhere in the world, for the sustainability of the economy and proper risk management, are optional in Afghanistan.
Insurance remains less developed mainly due to the lack of a legislative framework, no law enforcement and lack of state attention to developing this sector. Almost all government agencies and state-owned enterprises do not provide for insurance in their annual budgets.
Currently, there are five insurance companies in Afghanistan including a state-owned insurer — Afghan National Insurance Company (ANIC).
The state insurance firm used to issue motor third-party liability insurance coverage on an exclusive basis as the sole insurance provider in Afghanistan before 2008. It was made optional for the vehicle owners following the entrance of private insurance firms into the market.