The Central Bank of Azerbaijan (CBA) predicts that by the end of 2023, the insurance sector will amount to AZN 1.2-1.3 billion (~EUR 0.68 billion), as was stated by CBA Director General Ziya Aliyev at the scientific and practical conference "Successful Ways to Resolve Insurance Disputes", ABC.AZ wrote.

"In 2019, AZN 650 million of premiums were collected in Azerbaijan. In 2023, this figure will be AZN 1.2–1.3 billion, which will mean an almost two-fold growth in the insurance market in four years", the CBA Director General explained.

At the same time, capitalization of the insurance market is still very small and thus is a factor limiting the ability of insurance companies to take risks, as Zahid Oruj, head of the Center for Social Research, said at the conference.

According to him, at present, the total amount of charter capital of all insurers in the country is about AZN 310 million. This amount is quite low compared to the capital of a mid-range European insurance company. He also added that along with capitalization, it is important to create insurance reserves and direct resources to investments. “Insurance reserves can serve as an important credit resource for the country's economy”, Zahid Oruj believes.

In addition, the head of the Center for Social Research noted that in 2022, the Azerbaijani insurance market was only 0.7% of GDP, which means a decrease of 0.2% compared to 2021. At the same time, the share of the insurance sector in the GDP of European countries amounted to 3.9%, i.е. Azerbaijan is more than 5 times behind European countries in terms of the insurance market development. Zahid Oruj emphasized that even Georgia is ahead of Azerbaijan in the insurance market development. “In 2022, the insurance market in Georgia was 1.27% of GDP, while in Armenia this figure was 0.7% of GDP”, he said.

*EUR 1 = AZN 1.91 (18.07.2023)