Azerbaijan’s AtaSigorta company: Unprofitability on insurance of those going abroad to increase

Economy Materials 19 March 2020 19:50 (UTC +04:00)
Azerbaijan’s AtaSigorta company: Unprofitability on insurance of those going abroad to increase

BAKU, Azerbaijan, March 19

By Yusif Aghayev – Trend:

The unprofitability on insurance of those going abroad will increase, Nigar Ibrahimova, underwriting director in Azerbaijan’s AtaSigorta insurance company, told Trend.

“This type of insurance belongs to the personal insurance and is in demand when citizens leave their country of residence,” Ibrahimova said.

“In Azerbaijan, this type of insurance is usually widespread among people traveling to the European countries as a health insurance policy is a prerequisite for issuing a visa to visit the EU countries,” Ibrahimova said.

“Although in many countries this insurance policy is purchased by travelers together with the entire tour package, regardless of the country to which they are going,” she said.

“Until the moment when World Health Organization (WHO) officially recognized coronavirus COVID-19 as a pandemic, this disease, along with all acupuncture (suddenly arising) diseases, was included in the insurance coverage on this type,” underwriting director said.

“However, after recognition, the insurance company renders medical care only until the disease is diagnosed, and if confirmed, medical treatment will be carried out according to the WHO protocol, under the supervision and expense of the country in which the tourist stays,” Ibrahimova said.

“But if a tourist is in compulsory quarantine in the territory covered by insurance policy, this is not an insured event and it is not covered by insurance policy,” underwriting director said.

“At the same time, this coverage for this type of insurance, as a rule, is not limited, as it is mainly presented as a complex or “mixed” type of insurance, in which risks of not only personal, but also other types of insurance are accumulated,” Ibrahimova said.

“It is very common to render the services on repatriation insurance services, as well as posthumous repatriation of the remains, as well as insurance of cancellation and delay of international flights,” underwriting director said. “Given the situation prevailing throughout the world, and especially in the European countries, losses on these types of additional insurance coverage will increase by many times.”

“Taking into account that the restrictions imposed on the trips abroad related to the spread of coronavirus in the world may last an indefinite period, travel insurance fees will greatly decrease,” Ibrahimova said.

“In case of increasing losses, this may lead to catastrophic loss for this type of insurance, forcing all insurers involved in this segment to completely review the underwriting policy,” underwriting director said.

The Azerbaijani insurance companies collected insurance premiums on this type in the amount of 4.9 million manat ($2.9 million) in 2019, which is 1.1 million manat ($647,058) or 29.8 percent more than in 2018.

In accordance with the analysis of statistics of the previous years, the Azerbaijani insurance companies collected insurance premiums worth 3.1 million manat ($1.8 million) on this type in 2017 while insurance premiums worth 2.6 million manat ($1.5 million) in 2016. The positive growth dynamics of this type of insurance was observed up till now.

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