Requirement of COVID-19 insurance from Azerbaijani tourists - is it realistic to get it?

A number of countries have recently tightened visa requirements due to the coronavirus pandemic. Thus, the travel insurance provided during visa applications requires an article related to the COVID-19 guarantee, the maximum amount of the guarantee.

The lack of provisions in the insurance document submitted by Azerbaijan-based insurers and the fact that the guarantee for COVID-19 is around 1,000-1,500 manats create a certain problem for those who want to fly from Azerbaijan to those countries. In many cases, our citizens need to use the services of foreign insurance companies to solve this problem.

Expert on insurance Ali Bayramov told Report that this is because the insurance companies are not professional: "The vast majority of the European countries, even neighbouring Georgia, do not allow foreign nationals into their territories without COVID-19 guarantees.

In addition, among the requirements are conditions related to limits. Thus, a number of countries want the guarantee for this disease to be at a maximum level. This is understandable. Because Azerbaijani citizens can be infected with the coronavirus when they are in that country, and this causes certain costs. In some countries, these costs are not free for foreigners, although they are free for their own citizens. As a result, a problem arises. For this reason, countries have made such a request when applying for a visa.

As for Azerbaijan, our insurance companies are always late in making decisions. There is no serious problem here. Our insurance companies can obtain this guarantee through existing reinsurers or other reputable reinsurers and offer it to their clients. The high incidence of coronavirus infection is the reason why our insurers are wary of this issue. For example, as coronavirus treatment is expensive in Europe, the insurance companies fear losing a lot of money. For this reason, they set such a limit [around 1,000-1,500 manats]. Because they think it's a high risk. But it does not mean that they must take such a step because our insurance market has no measures against modern insurance risks.

Now, one of the highest risks in the world is cyber risks. We already see in our country that phishing attacks are often carried out against ordinary citizens, and money is stolen from their cards. The question is, does the Azerbaijani market provide a guarantee for this risk? Of course not!

There is nothing complicated here. In fact, there are large companies that can guarantee COVID-19. If our insurance companies are afraid, they can share their risks with reinsurance companies. As a result, they can provide the necessary security to the country's citizens. It's just that insurance companies are unprofessional and don't keep up with what's happening in the world."

The expert believes that the appeal of citizens to foreign insurance companies causes the outflow of currency: "For this reason, an Azerbaijani citizen travelling to the Schengen area obtains this guarantee online from the system of global companies such as AXA, which is a gross violation of the law. Because according to the legislation, the subject of insurance in Azerbaijan, the insurance interest must be insured only in local companies. If a citizen receives this guarantee from a foreign insurance company, it means the outflow of currency, and in this process, only the Azerbaijani economy loses.

I would also like to note that for many years, travel insurance portfolios have been the most profitable insurance sector for Azerbaijani insurers. Therefore, insurance companies cannot claim to be at a loss. This shows a kind of absurd situation. If your loss is low, why do not you take any initiative?

These issues must be raised by the Azerbaijan Insurance Association (AIA) and solved by the Central Bank of Azerbaijan. The ASA should discuss and make concrete proposals."

Turabkhan Turabkhanov, an advisor to the chairman of the board of directors of one of the insurance companies operating in the country, also noted the problem. He thinks that the high amount of the guarantee for COVID-19 also leads to an increase in commission fees:
"As the number of people vaccinated against COVID-19 in the country increases, so does the number of applications for travel insurance. The embassies of the Schengen countries want full guarantees against COVID-19. But we have a certain amount of guarantees (1,500-2,000 manats) from local companies. So embassies often do not accept this agreement. Then citizens buy insurance from foreign companies, which is very expensive.
Getting the guarantee from abroad costs about 250 euros. Of course, this differs from our companies slightly. It would be better to provide this guarantee in Azerbaijan. There is a big gap in this area. Like everyone, I am dissatisfied. Probably, we have some problems with the lack of this guarantee, which we do not know."