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New attractive investment tool being formed in Azerbaijan

Business Materials 21 January 2018 12:21 (UTC +04:00)

Baku, Azerbaijan, Jan. 21

By Anvar Mammadov – Trend:

Endowment insurance is becoming more interesting for the population of Azerbaijan, insurance expert Khayal Mammadkhanli told Trend.

He said that endowment insurance gradually turns into the main product of the life insurance market.

“A total of 177.86 million manats of premiums on voluntary life insurance were collected last year,” he noted. “More than 77 percent of this amount, that is, 137.93 million manats, accounted for premiums collected on endowment insurance, which is 72.9 percent more than in 2016.”

The expert noted that there are several reasons for the popularity of this insurance service.

“The financial crisis that affected Azerbaijan as well weakened people’s confidence in banks,” he said. “Besides, inactivity was observed in the real estate market, which has always been a key investment tool for the population. All this led to the population’s search for alternative investment tools. Another important factor of the popularity of endowment insurance is that the money directed to this insurance service is not subject to taxation and social deductions.”

In general, the expert noted that the last few years can be called a period of active development of the life insurance market. During this time, voluntary life insurance alone occupied quite a large part of the market - about 15-20 percent, he said.

Azerbaijan’s life insurance market totaled 211.02 million manats in 2017 that is 43.7 percent more than in 2016.

Three companies – PASHA Life, Ateshgah Life and Qala Life – have licenses for rendering life insurance services in Azerbaijan.

These companies’ share in total premiums collected by insurance companies in Azerbaijan amounted to nearly 37.9 percent in 2017.

In 2017, these companies paid claims of 130.63 million manats on all types of life insurance (an increase by 43.6 percent for the year), which accounts for 50.8 percent of all payments in the market.

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