Azerbaijan has great interest in cumulative life insurance
Azerbaijan, Baku, July 28 / Trend A. Akhundov /
Azerbaijani insurance companies have begun to actively promote voluntary forms of life insurance.
At present, the "Qala Heyat" life insurance company is working to introduce cumulative insurance, Vusal Abbasov, chairman of the board of the founding company and sole reinsurance company "AzRe Reinsurance", told Trend.
"According to the law, part of the salary directed at life insurance is exempt from income tax and deductions for state social obligatory insurance", Abbasov said. "A person receives money as though accumulated by the insurance company after the contract period expires (it can be concluded for at least three years)."
Abbasov said that the insurer may also receive revenues from governing funds.
Abbasov added that the company is preparing a new product within operations on voluntary insurance development.
"We plan on developing voluntary types of life insurance", he added. "We are working on these types of products now."
"Qala Heyat" has permission to provide services on one obligatory and four voluntary types of insurance. Qala Heyat is based on the transformation of Qala Sıgorta's activity. The company launched its activity in 2011.
Abbasov said that today 90 percent of the company's portfolio falls to compulsory insurance against accidents and occupational diseases.
Atesgah Heyat Life Insurance Company deputy chairman Madatli Akbar said that according to the contract for cumulative life insurance, the employer acts as the insured rather than an employee.
"At present, we have both large and small corporate customers", Madatli said.
In this case the insurance company pays the insured sum. If the money is deposited in the bank, the heirs of the deceased may receive only the mortgaged amount.
The Azerbaijani Atesgah Heyat Life Insurance Company intends to maintain its leadership position on the voluntary life insurance market, Chairman Akbar Madatli told Trend earlier.
"Last year, the company collected 1 million manat on voluntary life insurance," he said. "This year we expect to get 1-1.2 million manat."
Madatli thinks that other two life insurance companies Pasa Heyat and Qala Heyat will collect 1 million manat on voluntary kinds of insurance.
"This is the maximum, because as far as I know, they have not begun active work for voluntary insurance yet, but they plan to use new products," Madatli said.
"Atesgah Heyat" is the first life insurance company in the country, established in December 2008.
The company provides life insurance services such as urgent life insurance, credit life insurance, critical illness insurance and compulsory life insurance against accidents at work.
"Pasa Heyat" insurance company deputy chairman Niyaz Ismayilov said that the company plans to bring the share of voluntary life insurance in its portfolio up to 30 percent by late 2011.
"We have already begun working to provide voluntary insurance - life insurance and life insurance of people who have taken loans from banks," he said. "We have implemented the life insurance services this month."
According to the State Insurance Supervision Service under the Azerbaijani Ministry of Finance, Pasa Heyat collected premiums amounting to 6.218 million manat in the first half of the year, taking 43 percent of the life insurance market and 6.33 percent of the total insurance market in the country. Atesgah Heyat Company collected 4.613 million manat. About 31.9 and 4.69 percent fall to the company. Qala Heyat collected 3.542 million manat. About 24.5 and 3.6 percent fall to this company.
About 0.6 percent of the life insurance market (worth about 85,000 manat) is given to portfolios of life-insurance companies which provide similar services before a three-year moratorium expires in late March this year. The company indicates that only specialized companies deal with life insurance.
The total amount of premiums for voluntary life insurance amounted to 1.52 million manat. The Azerbaijani insurance companies' premium for compulsory insurance and disability, resulting from occupational diseases and accidents at work, was 12.938 million manat in the first half of 2011.