15:54 - 18.09.2026

---

September 18, Fineko/abc.az. The insurance sector of Azerbaijan has been rapidly developing in recent years amid CBA regulatory mechanisms, digitalization and improvement of insurance literacy.

Despite growth of the overall market portfolio, not all market participants are able to maintain the same pace in a competitive environment.

The reduction in premiums on some insurance companies is the result of both structural changes within the sector and the strategies of the companies themselves.

The main reasons for the reduction in premiums

Changes in the compulsory insurance portfolio: An analysis of market indicators shows that, especially for types of compulsory insurance (for example, compulsory insurance of civil liability of owners of motor vehicles - CTP), there are fluctuations in premiumsin certain periods.

For companies with high share of compulsory insurance in their portfolio, if the market share is lost or the number of contracts for risk management is reduced, the overall dynamics of premiums goes into negative territory.

Competition in the voluntary insurance market: In key segments such as voluntary medical insurance (VMI) and CASCO, the preference of corporate clients for large players leads to a reduction in the customer base of relatively small and medium-sized insurance companies.

Tightening of the underwriting policy: Some companies deliberately abandon high-risk segments with high loss-making (for example, insurance of vehicles that often get into accidents). On the one hand, this leads to lower fees in the short term, but on the other hand, it helps to maintain the financial stability of the company.

Impact of the level of payments on fees: Against the background of an increase in insurance payments in the market, companies with an unprofitable portfolio are choosing a more cautious strategy to preserve capital reserves, which also leads to a decrease in premiums.

Market balance and prospects: For companies experiencing lower premiums, the main areas of entry remain improving the quality of services, expanding digital sales channels, and launching new voluntary insurance products.

Against the background of Central Bank's capital requirements and transparency standards, the share of weak players is decreasing, while companies with a developed service infrastructure are strengthening their positions.

As a result, a reduction in premiums is not in itself a sign of bankruptcy, but it does serve as a serious signal to review market strategies and increase the focus on customer satisfaction.