BAKU, Azerbaijan, Feb. 13
By Yusif Aghayev – Trend:
The most unprofitable types of insurance in Azerbaijan in 2019 were announced, Trend reports referring to the Azerbaijani Central Bank’s report.
The most unprofitable type was insurance of planes. The amount of the payments increased by 22 times compared to 2018 and amounted to 19.2 million manat ($11.3 million).
The amount of premiums collected for this type in 2019 was equal to 10.6 million manat ($6.2 million), while unprofitability was 181 percent. The unprofitability for this type in 2018 was less, at the level of eight percent. The increase in the unprofitability of this type of insurance was associated with big payments made by Silk Way Insurance last year.
Survival insurance related to the class of voluntary life insurance ranked second. The amount of payments for this type reached 120.5 million manat (over $12 million) with fees worth 166.1 million manat ($97.7 million), unprofitability - more than 72 percent.
This has been conditioned by a sharp drop in fees for this type of insurance. The reason is that last year the rules, according to which citizens applying for a life insurance policy (survival insurance) were exempted from paying taxes and payments to the State Social Security Fund were abolished in 2019. As a result, the population is not interested in this kind of insurance.
As a result, the total amount of collected premiums on survival insurance decreased by 87.8 million manat ($51.6 million) in 2019 compared to 2018, while payments were still made.
The compulsory liability insurance of motor vehicle owners, where payments reached 67.2 million manat ($39.5 million) with fees worth 100.4 million manat (over $59 million), unprofitability - almost 67 percent, ranked third.
This is mainly connected with an increase in enlightenment of the population in the field of insurance, the digitalization of the system of issuing insurance certificates, strengthening of the state control in relation to the compliance of obligations by insurers and many other factors.
The farm animal insurance, where the amount of payments reached 937,000 manat ($551,176) with fees worth 1.4 million manat ($823.5 million), unprofitability - more than 65 percent, ranks fourth. This type of insurance is traditionally considered unprofitable.
The voluntary medical insurance, where the amount of payments reached 60.5 million manat ($35.5 million) with fees worth 95.8 million manat ($56.3 million), unprofitability - more than 63 percent, ranks fifth. The voluntary medical insurance is also considered a very unprofitable type of insurance. The compulsory medical insurance is being gradually introduced in Azerbaijan since 2020.
In general, the Azerbaijani insurance companies paid insurance indemnities worth 301.5 million manat ($177.3 million) in 2019, which is 61.2 million manat ($36 million) or 25.4 percent more than in 2018.
Today, 22 insurance companies and one reinsurance companies operate in Azerbaijan.
(1 USD = 1.7 AZN on Feb. 13)