Expert: In case of devaluation, insurance companies` deposits in banks to be under threat


March 10, Fineko/abc.az. The decrease in the cost of crude oil on the world market will undoubtedly not pass by Azerbaijan, as a state whose main budget revenue is formed at the expense of oil money.

ABC.AZ was informed on the occasion by insurance expert Ilkin Ibragimov, when was commenting on the impact of the coronavirus on the insurance market, which is increasingly weakening the world economy.

According to the expert, the damage to one of the financial instruments, the insurance sector, is inevitable.

The expert believes that if the manat comes under high pressure amid the declining revenues in the country and growing payments abroad, this will have negative impact on the banking sector. This, therefore, will also affect the insurance market: "Our country’s insurance sector has started to develop recently, and population’s interest to insurance has not yet been formed, as problems with compensation payments appear. If there is any devaluation or closure of the bank, the deposits or current accounts of insurance companies in banks may be at risk, that increases the likelihood of difficulties with payments to citizens. In such circumstances, of course, the occurrence of certain problems between insurance companies and citizens can lead to undesirable consequences for the insurance sector."

By Elmir Murad