BAKU, Azerbaijan, May 11
By Yusif Aghayev - Trend:
The Azerbaijani insurance companies collected insurance premiums worth 50 million manat ($29.4 million) in March 2020, which 18.355 million manat ($10.8 million) or 26.8 percent less than in March 2019, Trend reports referring to a published report of Azerbaijan’s Central Bank (CBA).
Thus, at first glance it seems that the insurance market has significantly slumped. However, a detailed analysis of the dynamics of collection of insurance premiums for certain insurance classes and types shows the opposite situation.
The collection of premiums for voluntary insurance types in March of this year amounted to 37.052 million manat ($21.8 million), which is 11.05 million manat ($6.5 million) or 42.5 percent more than in March 2019.
Meanwhile, voluntary life insurance fees amounted to 23.4 million manat ($13.7 million), showing a growth of 9.684 million manat ($5.7 million), or 1.7 times compared to the same period in 2019. The major part of these fees namely 19.427 million manat ($11.4 million), or 83 percent, accounted for accumulative life insurance.
Thus, the increased interest in this type of insurance continues to positively affect the growth dynamics of collecting premiums in the current year.
The death insurance premiums also increased significantly, amounting to 3.8 million manat ($2.2 million), which is 46 percent more compared to March 2019.
As for voluntary types of non-life insurance, in this segment, the collected premiums increased to 13.6 million manat ($8 million), which is 1.369 million manat ($810,000) or 11.1 percent more than in March of last year.
In the personal insurance segment, the amount of collected insurance premiums amounted to 5.5 million manat ($3.2 million), which is 173,000 manat ($101,760) or 3.2 percent more than in the same period in 2019. The same situation is observed in the segment of voluntary health insurance.
Fees in the property insurance segment also showed steady growth, reaching 8 million manat ($4.7 million), exceeding the same period of last year by 14.4 percent.
Meanwhile, fees for voluntary comprehensive motor insurance (casco) increased by 18.5 percent and those ones for cargo insurance by 39.6 percent.
The premiums for voluntary insurance of property against fire and other risks remained almost unchanged compared to March 2019, amounting to 3.218 million manat ($1.89 million).
A multifold reduction in the volume of collected premiums fell on compulsory types of insurance, which amounted to 12.96 million manat ($7.62 million) in March 2020, which is 3.2 times less than the same month of last year.
Meanwhile, compulsory liability insurance premiums for vehicle owners decreased by 1.606 million manat ($940,000) or by 21.5 percent compared to March 2019.
Compulsory real estate insurance premiums increased by almost 2.5 times, reaching 3,147 manat ($1,850), exceeding the same indicator in March last year by 1,860 manat ($1,090).
Compulsory insurance fees against industrial accidents and occupational diseases significantly reduced by 1.9 times, amounting to as much as 3.5 million manat, or $2 million (against 6.7 million manat, or $3.9 million in March 2019). This was due to overall economic downturn resulting from not only the coronavirus pandemic, but also from changes in global oil prices.
The main decrease in the amount of collected premiums for compulsory insurance in March fell on compulsory insurance of judicial and law enforcement officials, as well as military personnel. The decrease in the two forenamed compulsory types of insurance amounted to 26.343 million manat ($15.5 million), unlike of the indicator in March last year.
Implementation of the compulsory insurance of military personnel and law enforcement officers is the exclusive competence of the Azerbaijan State Commercial Insurance Company; thus, these types aren’t market ones.
Moreover, most of the fees for these insurance types are collected when updating large contracts in the first quarter of each year. So, in March 2019, insurance premiums worth 28.6 million manat ($16.8 million) were collected for these types, while the collection from January through February last year amounted to only 1.87 million manat ($1.1 million).
In January 2020, the collection of insurance premiums for these types was only 388,000 manat ($228,240), while from January through February 2020 amounted to 31.15 million manat ($18.32 million). Thus, the collection of premiums for these types of insurance in the first quarters of both 2019 and 2020, in the amount of approximately from 30 million manat to 31 million manat (from $17.6 million to $18.2 million), was carried out with a difference of one month.
Summing up the above, it can be noted that the collection of insurance premiums in March 2020 for market types of insurance exceeded the same indicator in March 2019 by 8 million manat ($4.7 million).
In 1Q2020, Azerbaijani insurance companies collected insurance premiums in the amount of 240.7 million manat ($141.6 million), which is 39.5 million manat ($23.2 million), or 20 percent more compared to 1Q2019.
Today, 22 insurance companies and one reinsurance company operate in Azerbaijan.
(1 USD = 1.7 manat on May 11)
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