Azerbaijan Advances Insurance Reforms, Earthquake Risk Modeling

(MENAFN- Trend News Agency) BAKU, Azerbaijan, October 15. Azerbaijan is implementing a number of projects to develop the insurance sector and improve its regulatory framework, including refining motor insurance pricing, updating legislation on compulsory property insurance, modeling earthquake risks, and improving the institutional structure of the agricultural insurance system, Trend 's correspondent reports from the event.

Atakhan Hasanov, director of the Financial Stability Department at the Central Bank of Azerbaijan (CBA), made the remarks at a press conference on Thursday dedicated to the presentation of the Financial Stability Report.

He said the insurance sector continued to grow in the first half of 2026. Insurance premiums increased by 6.2% year-on-year to 900 million manats ($529.4 million) during the reporting period, driven mainly by voluntary insurance products. Insurance payouts rose by 27% to 550 million manats ($323.5 million).

“Amid market expansion, the insurance sector's assets have also continued to grow. In the first six months, the sector's assets increased by 5.8% to 1.3 billion manats ($764.7 million). The insurance sector is one of the key institutional investors in the financial system. Investment activity continued during the reporting period, with government securities, bank deposits, and corporate securities accounting for the bulk of the investment portfolio,” Hasanov said.

According to him, the insurance sector's loss ratio increased by 3 percentage points during the reporting period to 60.5%, while the expense ratio stood at 79%. Analysis shows that the loss ratio rose more sharply at several insurance companies with significant market shares.

Hasanov noted that the sector remained profitable despite these developments. Insurance sector profits totaled 90 million manats ($52.9 million) in the first half of the year. The sector's aggregate capital stood at 312 million manats ($183.5 million), exceeding the required capital level by 53%.

The department director emphasized that various measures to regulate and develop the insurance sector had been implemented this year.

“Work has been carried out to improve the system for calculating tariffs for compulsory motor third-party liability insurance, and relevant standards have been established for the coefficients used in calculating insurance premiums,” he said.

He added that measures had also been taken to improve the rules governing several types of insurance to increase consumer confidence in insurance services. These included regulatory work on comprehensive motor insurance (CASCO), compulsory motor third-party liability insurance, and personal accident insurance offered to individuals.

According to Hasanov, a draft law prepared to improve the regulation of compulsory property insurance had been submitted to the Cabinet of Ministers for consideration.

“In addition, a project to model catastrophic risks specific to Azerbaijan, particularly earthquake risks, has been completed,” he noted.

Hasanov said a draft law aimed at improving the institutional structure of the agricultural insurance system had also been submitted to the relevant government agencies for approval.

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