Collection of death insurance fees down in Azerbaijan

Politics Materials 13 March 2020 17:17 (UTC +04:00)
Collection of death insurance fees down in Azerbaijan

BAKU, Azerbaijan, March 13

By Yusif Aghayev – Trend:

The collection of death insurance premiums [accidental and natural] in Azerbaijan decreased in early 2020, Trend reports referring to the report of the Azerbaijani Central Bank.

The fees for this type of insurance related to the segment of voluntary life insurance demonstrate the decline during the last three years, the report said.

The total amount of fees for this type of insurance in the market amounted to 3.9 million manat ($2.3 million) in January 2018. In January 2019, it decreased by almost a quarter to 2.9 million manat ($1.7 million). A downward trend was observed in January 2020. The fees were fixed at 2.9 million manat ($1.7 million) in January 2020, the report said.

At the same time, the payment of insurance claims increased from 103,000 manat ($60,588) in January 2019 to 166,000 ($97,647) in January 2020, the report said.

While commenting on this decrease, Orkhan Shirinli, deputy chairman of the board of the Ateshgah Life insurance company, stressed that this type of insurance, although it is a voluntary type, is not in demand among Azerbaijani citizens.

“Insurance within this type is usually carried out under compulsion of banks and other credit institutions, which require insuring the life of the debtor from death in favor of the credit institution in case of the issuance of mortgage and other loans,” Shirinli added. “In this regard, the dynamics of the development of insurance premiums for this type of insurance depends on the changes in credit policy in the country's banking market.”

As for the changes in the dynamics of fees for disability insurance (decrease from 245,000 manat that’s $144,117 to 39,000 manat that’s $22,941) and insurance against incurable diseases (increase from 6,700 manat that's $3,941 to 20,200 manat that's $11,882), changing of the trend does not affect the overall market situation due to the traditionally low collection of fees for these types.

Only four insurance companies are involved in life insurance in Azerbaijan, namely, PASHA Life Insurance, Ateshgah Life Insurance, QALA Life Insurance and Xalq Life Insurance.

Some 22 insurance companies and one reinsurance company operate in Azerbaijan today.

(1 USD = 1.7 AZN on March 13)