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.