Azerbaijan defines roadmap for implementing bancassurance model

A roadmap has been established for the implementation of the bancassurance (bank-led insurance) model in Azerbaijan, Rustam Tahirov, Director of Financial Sector Sustainable Development Department at the Central Bank of Azerbaijan (CBA), said at an event themed Integration of the Banking and Insurance Sectors in Baku organized by the American Chamber of Commerce in Azerbaijan (AmCham).

Report quotes the CBA official as saying a cooperation platform has been created between the banking and insurance sectors: "The Azerbaijan Banks Association (ABA) and the Azerbaijan Insurers Association (AIA) have formed a working group at the leadership level. The group has defined a roadmap for the implementation of bancassurance products, and these products are being introduced step by step in line with the roadmap."

He added that the bancassurance model benefits all participants, including banks, which gain additional commission income: "It is also a tool to reduce and manage credit-related risks. Offering insurance products strengthens bank–customer relations and lays the foundation for what we call a relationship model. For insurance companies, it primarily provides sales channels – both physical and digital – offering access to new customers and markets. Experience also shows that it reduces sales costs. For financial services consumers, it enhances satisfaction and improves access to insurance services."

Taking these factors into account and analyzing international experience, the CBA has included the implementation of the bancassurance model among its strategic objectives.

"This model will positively impact both the growth of lending and the penetration and inclusiveness of insurance," Tahirov emphasized.