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EghtesadOnline: Iran’s insurance companies absorbed 335.9 trillion rials ($7.96 billion) in premiums during the previous fiscal year that ended on March 20, 2018, up by 21.1% when compared with the year before, the head of Central Insurance of Iran said.

Abdolnasser Hemmati added in a statement published on CII’s website that the total volume of claims paid by Iranian insurers during last year reached 211.2 trillion rials ($5 billion), which indicated a year-on-year growth of 16.4%.

The statistics have been disclosed three months after the previous year ended while they are preliminary and highly selective. 

CII has stopped its previous trend of publishing monthly data in full since Hemmati has taken charge, as he personally delivers quarterly reports. But there is a reason for that approach, especially concerning last year’s data, Financial Tribune reported.

As the official said, the number of issued insurance policies and paid claims grew by 11.9% and 51.1% respectively last year when compared with the year before. 

“Insurance companies issued 61 million policies last year and a total of 48.1 million counts of damages were paid out by insurers,” he said.

Hemmati did not disclose more details, but according to RiskNews, a specialized insurance news website close to industry insiders, about 42 million of the total amount of insurance policies pertained to personal auto policies (PAPs) and related to car accidents, while less than 20 million insurance policies were issued in other categories, the foremost of which was accidents policies at 4 million.

Fire policies accounted for 3 million of the total insurance policies while life insurance policies also amounted to 3 million. Another 2 million were for medical insurance policies with the rest going to a variety of other categories. PAPs and medical policies jointly grabbed the highest share of paid damages at about 70%. 

According to Hemmati, the ratio of the market’s claims declined by 2.5% when compared with the fiscal 2016-17 and reached 62.9%. 

The share of private insurance companies from the total volume of attracted premiums and paid damages stood at 67.8% and 58.8% respectively.

  Main Categories

According to the CII chief, the three categories of PAP, medical and life insurance grabbed the highest share of Iranian insurers’ premiums, which reached 37.4%, 23.3% and 14.4% respectively during the previous year. 

“What is more, the share of non-compulsory insurance (all insurance categories, except PAP and driver accidents) from the generated premiums of the insurance market reached 57.5%,” he said.

Data show that nine insurance companies, namely Iran, Asia, Dana, Day, Alborz, Parsian, Pasargad, Moalem and Kosar, collectively hold 81% of the market while each has a share of at least 3%. The remaining 19% have been distributed among 20 other insurers.

Iran is fully state-owned and the largest insurance company in the country while the government holds considerable shares of around 20% in Asia, Alborz and Dana. Efforts are underway to sell government shares in the last three aforesaid companies, but they have yet to be finalized.

In his report, the CII head also referred to the Herfindahl-Hirschman Index (HII) in Iran, a measure of market concentration used to determine market competitiveness. The index is calculated by squaring the market share of each firm competing in a market and then summing the resulting numbers. It can range from zero to 10,000.

  Competitiveness 

As the CII chief announced, HII of Iran’s insurance industry stood at 1,404 by the end of the previous fiscal year, which was 362 units or 20.5% less than the year before, indicating that the market is becoming more competitive.

Hemmati, who also heads Iran’s High Council of Insurance, put the per-capita premiums index during last year at 4.2 million rials ($99), which registered an 18.4% growth year-on-year. 

“It is predicted that the penetration ratio of the insurance industry will reach a minimum of 2.3%” during the fiscal 2017-18, he said.

According to RiskNews, Iran’s life insurance market was the only category to register meaningful growth during the previous year, as the number of its sold policies grew by close to 1 million to reach 3 million last year.

This is mainly because of CII’s increasing focus on the category. In addition to highlighting its importance with the aim of building a positive culture, the regulator has also offered incentives to insurers for establishing specialized life insurance companies to boost the category.  

 

Iran Insurance Central Insurance of Iran Iran insurance premiums Iran insurance companies