EghtesadOnline: After Iran’s nuclear deal, the insurance industry’s international dealings have significantly increased, as Italian and German firms are keen on buying the shares of state-owned Iran Insurance Company, the president of Central Insurance of Iran said.
“Iran’s insurance industry has a great potential for attracting foreign investment,” Abdolnasser Hemmati added during the opening ceremony of Kish Invex 2017 on Monday, IRNA reported.
Kish Invex, one of the most important events for the Iranian money and capital markets, aims to provide a venue for all financial players, namely banks and credit institutions, insurance companies, project leaders and investors in energy, mining, tourism and housing projects of both public and private sectors, to pursue their targets in a professional environment.
During the opening ceremony of the expo, which is underway in the Persian Gulf island of Kish, the CII president noted that international companies are ready to invest in Iran’s insurance industry, Financial Tribune reported.
“Last year, we managed to get coverage from a German reinsurance company for the first time after the lifting of international sanctions in January 2016,” Hemmati added.
The contract was signed in July between Iran’s Saman Insurance Company and the world’s largest reinsurance company, Munich Re, based on which risks in life insurance and capital formation categories are reinsured by Munich Re.
Hemmati noted that over $3 trillion of insurable assets exist in the country while only $1 trillion of it are already covered, which means about 70% of the country’s capital remain uninsured.
According to the CII president, only 14% of Iranian people are covered by life policies while 90% of cars do not have car insurance for body parts. He put the country’s insurance penetration rate at 2.1%, which has the potential to triple.
The latest edition of Kish Invex opened on Monday on the southern coast of Kish Island. More than 250 local and 70 foreign companies have reportedly participated in the key event that will run through Thursday.
Capital Market Presence
Transparency in Iran’s capital market has paved the way for the presence of foreign investors in the country, as an Italian firm recently bought a portion of an Iranian brokerage firm’s shares, announced the head of Iran’s Securities and Exchange Organization.
“The type of foreign investors’ participation in Iran’s financial markets is important for us, as we hope to extend our ties with various countries in the field of issuing securities and bonds,” Shapour Mohammadi was also quoted as saying by Tasnim News Agency.
The official was speaking during the opening ceremony of Kish Invex 2017.
“Iran’s capital market is one of the country’s gateways for attracting foreign investments, as the risk in the market is low and its profitability is relatively high,” he added.
Mohammadi explained that Iran’s Securities and Exchange Organization has been cooperating with the Central Bank of Iran and Central Insurance of Iran to boost market transparency by developing international standards in financial reporting systems. Referring to the fact that three Iranian private rating agencies with foreign partners have been recently licensed by SEO, the official hoped that foreign rating agencies will help improve the credibility of securities issued in Iran’s capital market.
“In line with our policies, the bylaw of corporate governance is being pursued by SEO, CBI and CII simultaneously,” he added.
According to the SEO chief, these measures assure investors that companies’ CEOs and internal auditors only move in line with investors’ interests to protect their investments and profits. Mohammadi noted that the volume of foreign investments in the Iranian capital market has registered a significant growth over the past year, as the number of investors reached 944 individuals and legal entities as of October 2017 from 813 individuals about a year ago.
“While the value of these investments marked a growth of 33%, the capacity for attracting foreign investments is way higher,” he concluded.