Reasons for great decline in Azerbaijani life insurance market disclosed

Finance Materials 29 October 2019 19:27 (UTC +04:00)

BAKU, Azerbaijan, Oct. 29

By Eldar Janashvili – Trend:

The life insurance volume in the Azerbaijani insurance market greatly decreased up to 30 percent because the rules, according to which citizens applying for a life insurance policy were exempted from paying taxes and payments to the state social security fund, were abolished in 2018, Khayal Mammadkhanli, expert in the field of insurance, chairman of the Insurance Intermediaries Committee of the Azerbaijan Insurers Association, told Trend.

“The life insurance market gradually decreased after the abolition of benefits when customers were forced to transfer 50 percent of the salary for payment of taxes and to the state social protection fund when applying for a life insurance policy,” the expert said.

“The life insurance payments amounted to 50 million manat in the first quarter while the life insurance payments totaled only 30 million manat during the second and the third quarters,” Mammadkhanli added. “The reason for this is the legislative sphere.”

Touching upon the development of certain products in the life insurance market, Mammadkhanli stressed that endowment insurance mainly decreased, the loss on which amounted to over 67.4 million manat.

“For comparison, the accidental death insurance decreased by 500,000,” the expert said. “The growth was observed in other categories.”

Regarding the development of the life insurance market as a whole, the expert stressed that the share of life insurance premiums out of the total volume is expected to increase from 30 percent up to 50-60 percent as it is observed in the countries with an advanced insurance market.

The volume of the Azerbaijani life insurance market amounted to over 168.1 million manat from January through September 2019, which is 28.5 percent less than in the same period of last year.

(1 USD = 1.7 AZN on Oct. 29)


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