Manyfold increase observed in Azerbaijan's property insurance fees
BAKU, Azerbaijan, Feb. 21
By Yusif Aghayev – Trend:
Property insurance fees in Azerbaijan increased many times, Executive Director of the country's Compulsory Insurance Bureau Rashad Ahmadov said, Trend reports on Feb. 21.
Ahmadov added that if in January 2019, the number of insured real estate properties amounted to approximately 8,000 properties, in January 2020 this number increased by more than 20 times, amounting to about 166,000 properties.
Such a rapid growth was achieved through compulsory insurance of real estate properties owned by individuals.
“The volume of insured real estate properties is close to 10 percent of the total volume registered in the country’s State Committee on Property Issues. Moreover, the potential of this segment is quite large and the growth prospects are considerable,” the executive director said.
In addition, Ahmadov touched on the prospects of digitalization of compulsory real estate insurance.
“As known, compulsory liability insurance of vehicle owners in Azerbaijan is carried out in electronic form, an appeal of vehicle owners and insurance contracts are carried out online, without the use of paper workflow,” the executive director noted.
This became possible due to the integration of the database of the Compulsory Insurance Bureau on liability insurance of vehicle owners and the electronic system of Azerbaijan’s Ministry of Internal Affairs.
As Trend reported earlier, to digitalize compulsory property insurance, it is necessary to integrate the bureau’s database and the electronic system of the State Committee on Property Issues.
"The implementation of this process and adoption of relevant regulatory legal acts are necessary. At the moment, in accordance with the results of the meeting held on this issue in the Cabinet of Ministers of Azerbaijan, the Compulsory Insurance Bureau of Azerbaijan has launched the implementation of this project in test mode" Ahmadov added.
Since January 1, 2016, compulsory liability insurance of vehicle owners in Azerbaijan has been carried out in electronic form, without paperwork.
Azerbaijan’s insurance companies collected insurance premiums in the amount of 681.1 million manat ($400.6 million) in 2019, which is 46.7 million manat ($27.4 million), or 6.4 percent less compared to 2018. At the same time, fees in the segment of compulsory insurance significantly increased and amounted to 224.5 million manat ($132 million), showing an increase of 32.7 million manat ($19.2 million), or 17 percent.
Currently, 22 insurance companies and one reinsurance company operate in Azerbaijan.
(1 USD = 1.7 AZN on Feb. 21)