We present the traditional annual interview with Niyaz Ismayilov, Chairman of PASHA Life Insurance OJSC, dedicated to the results of 2024:
Dear Niyaz muallim, could you please share information about the results for 2024? In previous years, you consistently broke your own records. What do the numbers indicate this year?
I would like to note that we concluded 2024 with great success, achieving significant growth in all financial indicators. Looking at the figures, we attained a 22% increase in insurance premiums, a 13% growth in the volume of our assets, and a 20% rise in our profit for 2024. To compare, while our profit in 2023 was approximately 43 million AZN, this year, following IFRS standards, this figure has exceeded 50 million AZN.
As is now evident, this means we have once again surpassed last year’s record profit in the insurance sector. I must highlight that this is a record achievement not only in life insurance but also in the history of all insurance companies.
What is the company's current level of stability? There have been reports in the media suggesting an increase in the company's loss ratio.
Yes, I’ve seen that information as well, but I’d like to emphasize that this is not an indication of increased losses. On the contrary, it highlights PASHA Life’s growth. This situation primarily stems from the rise in savings-oriented product volumes and the payments made to customers for contracts that have reached maturity.
In fact, the significant volume of payments reflects the strength of our financial structure and the trust our customers place in us. It’s worth mentioning that most of the customers whose contracts have matured have renewed their contracts with us. This demonstrates the growing interest and confidence in insurance products.
In the insurance sector, losses are more commonly tied to risk-based products, not savings-based ones. These losses are usually calculated based on events like death or disability. As for the loss ratio, it’s important to note that this figure has remained stable for several years without any major changes.
You often emphasize the contributions of employees. Have any specific projects been implemented in this area?
I must note that our company's strategic plan includes several critical enablers aimed at achieving our financial goals and further growing our assets. For example, Customer Development, Lean process management, IT technologies, the implementation of Agile methodologies, fostering a data-driven culture etc.
To maintain high levels of customer trust and premiums while ensuring the company's financial stability, internal initiatives such as cultivating Risk Culture and Data Culture are particularly important. In 2024, we made significant strides toward these goals. Some notable examples include implementing Solvency II standards for risk management, transitioning to IFRS17 standards for financial reporting—the first such initiative in the CIS region—expanding Agile methodologies across the company, and advancing our data-driven culture to a more mature level.
When discussing these directions, it is essential to highlight that the foundation of all these efforts lies in our talents and their development. These strategies provide a roadmap for achieving our ambitious goals, but it is our talents that serve as the driving force behind these activities and the cornerstone of our success.
As I mentioned in one of my previous interviews, we have already undertaken significant work in the development and cultivation of talent. One of the key steps in this direction was the creation and company-wide introduction of Leadership Principles in 2024. Despite being called Leadership Principles, these eight guidelines are not limited to our leadership team; they serve as a beacon and guide for all employees in their daily work, discussions, and decision-making processes. Our expectation is that these principles will become the foundation of all our activities.
These principles aim to ensure transparency in the company’s management processes and assist employees in making sound decisions. Moreover, we plan to integrate these principles into all internal management systems. For instance, every hiring decision will align with these principles.
In the near future, I plan to share more detailed information about each of these principles on professional platforms. As an example, one of the principles is "Customer in Mind." This principle emphasizes that “Leaders are customer advocates. They go the extra mile with a proactive stance to anticipate customer needs. Leaders view both overt complaints, subtle feedback and data as areas for development.” This principle is critical because customer satisfaction and the improvement of customer experience form the foundation of all our business activities.
It is also worth noting that, as shared on PASHA Holding’s social media, Leadership DNAs aimed at fostering a purposeful leadership culture across the Group have already been developed. PASHA Life’s Leadership Principles will integrate with these Leadership DNAs, creating a unified framework.
Last year, you mentioned steps toward transforming into an IT company. What are the latest updates in this area?
Our primary goal in transforming into an IT company, as highlighted in the example from our Leadership Principles, is to provide faster and higher-quality services to meet customer needs and expectations. To achieve this, we have made significant investments and advancements in Information Technology infrastructure and architecture.
For instance, we have completed the upgrade of our Data Warehouse using the latest IT technologies and initiated migration to Kubernetes-based systems. This enables us to automate processes more efficiently, develop more advanced software and applications, and enhance overall service quality.
As I mentioned in last year's interview, the implementation of a Customer Relationship Management (CRM) system has greatly improved our ability to respond to customer inquiries more promptly and effectively. Now, 90% of our customers can resolve their issues during the first call, saving time and avoiding additional complications. Moreover, this platform helps us better understand our customers, allowing us to provide personalized services and improve their overall experience with us.
Additionally, we are near completion of a Lead Management System (LMS), designed to streamline and simplify the onboarding process for new customers. This system reflects our customer-centric approach, enabling customers to access insurance services within minutes without unnecessary delays. The LMS is a fast and efficient solution that meets customer expectations.
We have also expanded the use of Robotic Process Automation (RPA) to enhance business processes and add value to customer experience. RPA ensures faster service delivery, particularly for mandatory life insurance, by automating premium collections and document processing for mortgage loans. This not only saves customers’ time but also improves service quality. To further promote and develop RPA adoption in Azerbaijan, we initiated the creation of an RPA community. This initiative aims to advance digital transformation, share experiences, and foster collaboration among companies in the country.
Furthermore, to enhance IT management efficiency, we have implemented international standards such as ITGC and COBIT. These standards ensure the effective execution of IT governance practices across our operations.
All these initiatives contribute to increased efficiency in internal processes while enabling us to deliver top-notch services to our customers. They also lay the groundwork for future advancements, such as incorporating artificial intelligence technologies and improving risk management capabilities.
The results of these efforts are reflected in our consistently high NPS (Net Promoter Score), which remains above 85%, a testament to our commitment to excellent customer service and experience.
As we know your new product was launched this year. How confident are you in its success?
Yes, as I mentioned before, we have been working on new products. Globally, life insurance companies typically develop in two main directions: savings-oriented products and risk-based products. These products are usually offered to customers through bank channels. Initially, we focused on risk-based products, but in the future, we aim to introduce other products through bank channels as well.
With great excitement, I would like to note that this year, we successfully brought one of the most essential products in the global insurance market—life insurance for individuals taking out consumer loans—and the expertise in this area to our country.
For context, nearly 3 million citizens in Azerbaijan who have taken out consumer loans currently lack life insurance, leaving them exposed to significant risks. Events such as death or disability after obtaining a loan can place a heavy burden on their families and loved ones, potentially causing severe financial and emotional strain. This situation negatively impacts the social welfare of individuals and communities.
To address this issue, the Azerbaijan Insurers Association, in collaboration with the Central Bank of the Republic of Azerbaijan, developed the life insurance product for loan borrowers to strengthen the insurance sector and improve the financial and social well-being of citizens. Currently, there are five life insurance companies operating in the market, all of which can present their offers through any bank. Customers are free to voluntarily choose and enter into agreements with any of these five companies.
I would like to take this opportunity to extend my sincere gratitude to the Central Bank of the Republic of Azerbaijan, the Azerbaijan Banks Association, and the Azerbaijan Insurers Association for their contributions and support in launching this new product.
As PASHA Life, one of our main goals is to strengthen the insurance sector in our country and increase public awareness of its importance. Insurance is a key factor in ensuring a safer and more secure living environment, which, in turn, positively impacts overall well-being. For this reason, one of our primary objectives is to contribute to the welfare and comfort of the population by promoting the voluntary insurance of consumer loans issued by banks and increasing the volume of insured loans.
Private pension funds have been a topic of discussion for years. Has there been any progress in this area?
Yes, relevant authorities are working on a draft law to establish private pension funds. It is worth noting that implementing pension benefits through life insurance companies is a widely practiced approach worldwide. Therefore, the Central Bank of the Republic of Azerbaijan has requested proposals from the Azerbaijan Insurers Association on this issue, and the Association has started collaborating with life insurance companies. The primary goal is to develop and implement a beneficial, sustainable, and modern pension system for the benefit of our state and citizens. Currently, we are reviewing the draft law and working on preparing related proposals. At the same time, we are exploring advanced global practices to develop a highly resilient and sustainable pension system mechanism together with Azerbaijan Insurers Association.
In developed countries, private pension funds play a significant role and offer numerous benefits to both the state and citizens. Private pension funds provide citizens with an additional income opportunity alongside state pensions, helping to improve financial stability during retirement. People can individually plan their future by investing in private funds, enabling them to achieve higher-quality pension benefits.
On the other hand, private pension funds reduce the social burden on the state by minimizing pressure on the state budget. These funds contribute to the formation of long-term financial resources, fostering economic development and deepening financial markets.
In Azerbaijan, establishing and developing private pension funds by considering international best practices will enable the formation of a sustainable and efficient pension system that serves the interests of both the state and its citizens.
Thank you, Niyaz muallim. What would you like to say in conclusion?
The recent plane crash has deeply saddened all of us. I would like to extend my heartfelt condolences to the families and loved ones of those who lost their lives and to our entire nation. Tragic events like this remind us of the preciousness of life and the importance of cherishing every moment.
Through our work, we aim not only to provide financial security but also to contribute to our society by building a more stable and safer future.
As we look forward to the coming year, I wish everyone good health, tranquility, and a future filled with happiness and well-being.