Central Bank: Azerbaijan's insurance sector liquidity remains in comfortable zone

The liquidity of Azerbaijan's insurance sector remains in a comfortable zone, significantly enhancing insurers" resilience to short-term shocks.

Report informs, citing the Central Bank, that sector liquidity was assessed using the methodology of the International Association of Insurance Supervisors (IAIS) and the Insurance Liquidity Ratio (ILR). This ratio evaluates whether insurers hold sufficient high-quality liquid assets to cover expected net cash outflows on insurance obligations over a three-month period.

Key figures for the first half of 2025:

Overall sector: High-quality liquid assets totaled 1.353 billion manats, expected cash outflows were 719 million manats, and projected cash inflows were 274 million manats, resulting in an ILR of 304%.

Life insurance segment: High-quality liquid assets reached 816 million manats, expected outflows were 462 million manats, projected inflows were 161 million manats, with an ILR of 271%.

Non-life insurance segment: High-quality liquid assets were 537 million manats, expected outflows 257 million manats, projected inflows 113 million manats, giving an ILR of 374%.

The bank concludes that maintaining high-quality liquid assets at adequate levels significantly strengthens insurers' resilience to short-term (three-month) liquidity shocks.