EghtesadOnline: Iran’s insurance companies generated about 110 trillion rials ($2.5 billion) in premiums during the first four months of the current fiscal year that ended on July 22, up by 23.4% compared with the same period of last year, the new head of Central Insurance of Iran said.
“Insurers’ margin was notably positive in that period since they paid about 60 trillion rials ($1.36 billion) in claims,” Gholamreza Soleimani Amiri also told reporters at a press conference on Monday, IBENA reported.
Soleimani, who is seemingly following the example of his predecessor Abdolnasser Hemmati –who has been appointed as the governor of the Central Bank of Iran– in personally announcing figures every few months instead of publishing official reports, discussed other aspects of the country’s insurance industry.
He said that during the four months, about 19.1 million insurance policies were issued, signifying a 7.7% growth, according to Financial Tribune.
The share of non-government sector stood at about 66.3%.
Motor insurance still held a dominating share of Iran’s insurance market at 38.8% and was followed by medical insurance policies with a 19.2% share. Life insurance policies, a main focus of the government and CII, had a 13% share of total number of issued policies.
Soleimani said insurance companies have about 60 trillion rials in reserves and conceded that they lag behind the money and capital market players. He also pointed out that the current 2.3% insurance penetration ratio is too low.
According to the official, CII, the sole regulator of the industry, aims to increase insurance premiums significantly to boost the industry.
It targets a 20% share of life insurance policies in the foreseeable future, wishes to increase the share of private insurance companies and enhance their financial strength.
Soleimani referred to the fact that the decline of rial’s value has presented a significant challenge to the insurance industry as with all other industries, adding that two solutions could be to increase insurance premiums and expand the insurance market.
“We are after expanding the market, but we will also have premium increases,” he said.
“We look to introduce two to three new and innovative insurance products each year.”
The CII chief pointed out that the regulator is keen on issuing bonds in the capital market to distribute insurance risks in times of sanctions.
On the probable exit of major global reinsurers such as Germany’s Munich Re and France’s SCOR from Iran’s market in light of US sanctions, the CII head said Iranian insurers and the regulator are strong enough to handle the risk locally.
“We hadn’t transferred all reinsurance coverage potential concerning air and sea, and when reinsurers cut off their cooperation with Iran, reinsurance coverage was transferred inside the country,” he added.
Referring to Iran Insurance Company, the major state-run insurer that currently takes up about 40% of the market single-handedly, Soleimani said CII has plans for the company in cooperation with the Ministry of Economic Affairs and Finance. He failed to divulge details, but was apparently referring to the government’s privatization drive in the insurance sector.