BAKU, Azerbaijan, April 7
By Yusif Aghayev – Trend:
Car insurance showed steady growth in Azerbaijan in February 2020, Trend reports referring to a report of the Central Bank of Azerbaijan.
The collection of premiums on voluntary insurance of vehicles amounted to 10.2 million manat ($6 million), which is almost 2.5 times more than in February 2019 (over 4 million manat that’s $2.3 million) and 3.1 million manat ($1.8 million) more than in January 2020 (over 7 million manat that’s $4.1 million).
The fees on compulsory liability insurance of vehicle owners amounted to 13.5 million manat ($7.9 million), increasing by 0.8 million manat ($0.5 million), or 6 percent, compared to February 2019.
The fees on voluntary liability insurance of vehicle owners amounted to 183,700 manat ($108,058), which is almost two times more than in February 2019 (95,200 manat that’s $56,000).
At the same time, the amount of the paid compensation on voluntary insurance of vehicles amounted to 2.2 million manat ($1.3 million), which is 0.5 million manat ($0.3 million) or almost 28 percent more than in February 2019 (1.7 million manat that’s $1 million).
The payments on compulsory liability insurance of vehicle owners amounted to 12.5 million manat ($7.3 million), an increase of 2.6 million manat ($1.5 million) compared to February 2019 (an increase of 26 percent).
Thus, loss on compulsory liability insurance of vehicle owners exceeded 92 percent, while in January 2020 it amounted to 87 percent.
The loss on voluntary insurance of vehicles sharply decreased in February 2020 compared to February 2019 (about 42 percent), amounting to about 21 percent.
However, this figure does not fully reflect the realities of the market as a sharp increase in the number of contracts concluded on this type will demonstrate loss in the following months.
The loss on compulsory liability insurance of vehicle owners continues to show intensive growth and breaks all records, the experts said.
To date, these loss ratios make this type absolutely unprofitable for insurers as the eight remaining percent do not cover the costs of doing business, given the amount of the paid agent commission fees. As a result, many companies that actively promoted this type were forced to reduce their turnover.
“Such an intense increase in premiums within voluntary car insurance is most likely associated with the early extension of a big corporate motor fleet,” Chairman of the Supervisory Board of the Association of Insurers of Azerbaijan Azer Aliyev said.
In general, the Azerbaijani insurance companies collected insurance premiums in the amount of 190.7 million manat ($112.2 million) and paid insurance claims in the amount of 49.3 million manat ($29 million) in February 2020.
Today, 22 insurance companies and one reinsurance company operate in Azerbaijan.
(1 USD = 1.7 AZN on April 7)