BAKU, Azerbaijan, June 25
By Yusif Aghayev - Trend:
Azerbaijani insurance companies should radically revise their attitude toward business and focus on developing new products and services, insurance market expert Ilkin Ibrahimov told the local ARB-24 TV channel, Trend reports.
According to the expert, the spread of the coronavirus pandemic (COVID-19) and the associated economic consequences caused serious damage to the insurance sector in many developed countries, including in Azerbaijan.
“During the COVID-19 pandemic, the risks for many classes and types of insurance are many times higher. First of all, it is life insurance and types related to personal insurance. In turn, this may affect the cost of insurance products and services, leading to its increase. As a result of the negative economic consequences of the pandemic, the purchasing power of both the population and the business community reduces,” added Ibrahimov.
“The combination of all these developments can lead to even more stagnation in the insurance market. To get out of this situation, insurance companies must radically change their attitude toward the rules of doing business and focus on developing new insurance products and services,” said Ibrahimov.
First of all, a lot depends on the state, in terms of introducing effective mechanisms related to the application and monitoring of compliance with legal requirements in the field of compulsory insurance, he noted.
The expert believes that the change in insurers’ activities should be primarily aimed at improving corporate governance and improving the level of customer service.
“In addition to the above, insurers must fill in those product niches that have become unclaimed as a result of the consequences of COVID-19 pandemic, with new similar products. So, as a result of border closure, insurance of medical expenses and other risks traveling abroad practically disappeared,” said the expert.
In exchange for this, domestic insurance companies should focus on developing insurance packages for domestic tourism, Ibrahimov noted.
Turkish Minister of Culture and Tourism Mehmet Ersoy recently said that the special insurance of tourists against COVID-19 that shall be obtained online will be operational in Turkey from July 1, 2020.
From January through April 2020, Azerbaijani insurance companies collected over 311.3 million manat ($183.1 million) of insurance premiums. The amount of collected premiums is 46 million manat ($27 million) or approximately 17.3 percent more compared to the same period of 2019.
Presently, 21 insurance companies and one reinsurance company operate in Azerbaijan.
(1 USD = 1.7 manat June 25)
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