Effectiveness of life insurance companies in Azerbaijan depends on sales network

Business Materials 21 January 2011 18:45 (UTC +04:00)

Azerbaijan, Baku, Jan. 21 / Trend U.Ismayilova /

The presence of only two specialized companies for life insurance on the Azerbaijani market does not hinder coverage of the country's economically active population with compulsory insurance on labor ability loss in production, head of the State Insurance Supervision Service under the Azerbaijani Finance Ministry Namig Khalilov said.

Under the legislation, only those companies that deal exclusively with life insurance and have a license for this type of service may provide services for this type of insurance.

"Provision of a new type of insurance does not require a large number of insurance companies, but only the presence of a large agency network," Khalilov said.

He said the sale of insurance services and signing of contracts is depending on the activity of the agent network, and with proper organization of the sales network it will not be a problem for insurers.

Over 500 agreements were signed on compulsory insurance on labor ability loss in production in Azerbaijan in the first half of January, he said. The companies launched this type of insurance in 2011. All contracts were signed, with two companies specializing in life insurance - Qala Heyat and Ateshgah Heyat.

In July 2010, Azerbaijani President Ilham Aliyev approved the law on compulsory insurance on labor ability loss in production.

Tariffs on this type of service vary depending on the level of risk and categories of employees.

Tariffs for compulsory insurance for categories of employees vary in the range of 0.2-0.5 percent of the salary fund, a category of workers - from 0.4 to 2 percent.