Car insurance fees up in Azerbaijan

Economy Materials 2 March 2020 20:18 (UTC +04:00)
Car insurance fees up in Azerbaijan

BAKU, Azerbaijan, March 2

By Yusif Aghayev – Trend:

The Azerbaijani insurance companies collected the premiums on voluntary insurance of vehicles (casco) in the amount of over seven million manat ($4.1 million) in January 2020, which is over three times more than in January 2019 (2.4 million manat that’s $1.4 million), Trend reports referring to a report of the Azerbaijani Central Bank.

At the same time, payments increased slightly from 872,000 manat ($512,941) to 995,600 manat ($585,647), which is an increase of 14 percent.

There was no particular recovery in the car lending segment in the banking segment, which for many years was the main catalyst for the development of this type of insurance in the country.

“This has been stipulated by several reasons,” Khayal Mammadkhanli, Azerbaijani expert in the field of insurance, told Trend.

“Firstly, this is the success of the Casco Boutique project, in which five different insurance packages are offered to customers on a single electronic platform, differing in terms of insurance coverage, premiums and franchise,” the expert added.

“Several leading Azerbaijani insurance companies, rather than one company, are the guarantors of the concluded agreements at Casco Boutique,” Mammadkhanli added. “The entire document flow has been digitalized and payment can be made in monthly installments.”

“The second reason was a high public awareness in the field of insurance,” the expert said. “More car owners have realized that compulsory liability insurance of vehicle owners does not cover many risks (natural disasters, damage or other detriment not related to road accidents, car theft, etc.). It is more advisable to purchase a policy of voluntary insurance of vehicles to fully insure a car.”

“The third reason for such an intensive increase in insurance premiums in this segment was the activity of the insurers themselves,” the expert said. “Many of them, faced with high loss in compulsory liability insurance of vehicle owners, have decided to focus more on voluntary vehicle insurance. As a result, new products, adapted in accordance with the needs of different categories of car owners, were released on the market.”

Over the past year, public awareness in the field of insurance has intensified, especially in the sphere of such “urgent" types as car insurance and real estate insurance, which affects an increase in the insurance culture in general and the development of the insurance market.

In total, the Azerbaijani insurance companies collected insurance premiums in the amount of 111.5 million manat ($65.5 million) in January 2020, which is 23.3 million manat ($13.7 million) or 26.4 percent more than in January 2019.

Today, 22 insurance companies and one reinsurance companies operate in Azerbaijan.