BAKU, Azerbaijan, October 13. Azerbaijan's insurance sector had total capital of 312 million manat ($183.5 million) in the first half of 2026, compared with required capital of 205 million manats, indicating that the sector's capital position remained above prudential requirements.
According to the Financial Stability Report published by the Central Bank of Azerbaijan (CBA), 15 insurance companies and one reinsurance company were operating in the country during the reporting period. Of the insurance companies, five provided life insurance services and 10 specialized in non-life insurance. The sector also included 23 insurance brokers and 459 insurance agents.
Total insurance premiums rose by 6.2%, or 51 million manat ($29.9 million), year-on-year in the first six months of 2026 to 867 million manats. Life insurance accounted for 60% of premiums, while non-life insurance made up the remaining 40%.
Life insurance premiums increased by 8.8%, or 42 million manat ($24.7 million), to 516 million manat ($303.5 million), while non-life insurance premiums rose by 2.6%, or 9 million manat ($5.2 million), to 351 million manat ($206.4 million). Voluntary insurance products were the main drivers of growth in both segments.
Compulsory insurance premiums fell by 23%, or 45 million manat ($26.4 million), to 150 million manat ($88.2 million). In contrast, premiums from voluntary life insurance rose by 14%, or 61 million manat ($35.8 million), to 483 million manat ($284.1 million), while voluntary non-life insurance premiums increased by 17%, or 35 million manat ($20.5 million), to 235 million manat ($138.2 million).
Concentration in the insurance market remained high. At the end of the reporting period, the Herfindahl-Hirschman Index (HHI) for life insurance fell by 119 points to 6,822, while the index for non-life insurance rose by 593 points to 3,813.
Premiums ceded to reinsurers also increased, rising by 23%, or 14 million manat ($8.2 million), year-on-year to 74 million manat ($43.5 million). They accounted for 8.6% of total premiums. Of the premiums ceded, 4.9%, or 3.6 million manat ($2.1 million), came from life insurance, while 95.1%, or 70.7 million manat ($41.5 million), came from non-life insurance.
Insurance claims also increased significantly during the reporting period. Payouts rose by 27.3%, or 118 million manat ($69.4 million), compared with the same period last year, reaching 550 million manat ($323.5 million). Of this amount, 402 million manat ($236.4 million) related to life insurance and 148 million manat ($87.05 million) to non-life insurance. Life insurance payouts increased by 32.5%, while non-life insurance payouts rose by 14.5%.
The insurance sector's assets increased by 5.8%, or 123 million manat ($72.3 million), in the first half of the year to 2.26 billion manat ($1.3 billion). Bank funds accounted for 37% of assets, government securities for 31%, non-government securities for 7%, accounts receivable for 10%, and other assets for 14%.
The sector's liabilities rose by 10%, or 151 million manat ($88.8 million), to 1.65 billion manat ($970.5 million). Insurance premium reserves accounted for 68% of liabilities, reserves for insurance claims for 23%, and other liabilities for 9%.
Insurance companies' investment portfolios expanded by 9.7%, or 140 million manat ($82.3 million), from the end of last year to 1.6 billion manat ($941.1 million). Investments consisted mainly of government and corporate securities, as well as bank deposits. Investment portfolios accounted for 76% of the assets of life insurance companies and 64% of the assets of non-life insurance companies.
The report also outlined the sector's liquidity indicators. At the end of the first half of 2026, the sector held 1.2 billion manat ($705.8 million) in high-quality liquid assets, against expected cash outflows of 793 million manat ($466.4 million) and expected cash inflows of 301 million manat ($177.05 million).
The sector's liquidity ratio (ILR) stood at 237%. The ratio was 206% for life insurance and 315% for non-life insurance.
Accounts receivable for insurance premiums increased by 9%, or 11.6 million manat ($6.8 million), from the beginning of the year to 140 million manat ($82.3 million). Receivables in life insurance fell by 6.1% to 48.5 million manat ($28.5 million), while those in non-life insurance rose by 19.2% to 91.6 million manat ($53.8 million). Receivables accounted for 6.9% of the sector's total assets.
The insurance sector's net profit rose by 11.9%, or 10 million manat ($5.8 million), year-on-year in the first half of 2026 to 90 million manat ($52.9 million). Life and non-life insurance companies each recorded profits of 45 million manat ($26.4 million).
At the same time, the sector's loss ratio increased by 4 percentage points to 89%. The loss ratio for compulsory motor third-party liability insurance rose by 6 percentage points to 115%, while the ratio for motor vehicle insurance increased by 2 percentage points to 87%.
The report noted that the sector's total capital fell by 69 million manat ($40.5 million) from the end of last year to 312 million manat ($183.5 million), taking dividend payments into account. Required capital increased by 1 million manat ($588,235.29) to 205 million manat ($120.5 million). Despite these changes, the sector's total capital remained above the required level.
