EghtesadOnline: As per an agreement between the Vice Presidential Office for Science and Technology and the Central Insurance company of Iran (CII), assistance of startups and knowledge-based firms are to be enlisted to revitalize the gradually expanding insurance industry.
In recent years hundreds of startups and knowledge-based companies have opened in Iran and some are offering insurance services, namely Bime Click, Bime Bazar, Bimito, and Fast Bime.
As per the agreement, signed earlier last week between Vice President for Science and Technology Sorena Sattari and CII’s new chief Gholamreza Soleimani Amiri, regulations governing activities of startups are to be eased paving the way for the expansion of their activities, the news website Peivast reported.
The agreement is in response to the growing presence of startups in the insurance sector. Walking through the streets of Tehran, or commuting on the capital’s subway, one cannot help but observe that every day, the number of startups offering insurance services is growing with companies hiring more billboards across the metropolis to promote their services, Financial Tribune reported.
Amiri says, “So far 10 startups active in the insurance sector have been identified by the CII. After evaluation by the Central Insurance company these firms will be registered with the CII.”
Most of the startups are said to be operating as insurance brokers. “We hope to tap their potential and enlist their help for expanding insurance services,” Amiri said.
He further notes that several new insurance policies have been introduced by Iranian companies; however, the firms have not been able to promote them properly. Startups can help promote the services, enhance people’s access and increase revenues of the growing industry.
Amiri points out that all insurance contracts signed in Iran are registered by CII in a digital database named ‘Sanhab’. The CII is set to provide startups with access to the relevant data bank. By analyzing the data, Amiri says, startups and knowledge-based firms will be able to come up with new insurance proposals, curb costs for services to families and devise smart marketing strategies.
Vice President for Science and Technology Sorena Sattari says that startups with their vision and creativity can revitalize the insurance industry, increase people’s access to services and curb insurance policy costs.
“In recent years several startups and knowledge-based firms have been offering insurance services. However, the range of their activities is rather limited. Through collaboration with the CII, we hope to boost the activities of the startups and increase their market share.”
He said there are over 3,600 knowledge-based firms in Iran that collectively recorded a turnover of 600 trillion rials ($4.2 billion) last year.
Sattari also pointed to the fintech industry in Iran saying that Insurtechs and startups active in the insurance industry have enough potential for higher growth.
Iran’s insurance industry earned 183 trillion rials ($1.28 billion) from premiums during the first six months of the current fiscal (March-September). According to CII data, the figure is 25.4% higher compared to the same period last year.
According to the international credit rating agency Capital Intelligence, Iran’s insurance sector remains highly fragmented, characterized by the dominant market position of Iran Insurance Company, the state-owned insurance company with a market share of 38% in FYE 2017, and the role of numerous small players.
The latter are struggling to achieve critical mass to cover costs, resulting in a highly competitive environment. Most Iranian insurers rely on the income from selling mandatory vehicle third party insurance policies. The rates of such services in Iran are politically driven rather than risk-based, often leading to underwriting losses that are partially offset by investment income.
Startups and knowledge-based firms can help inject new life into the insurance industry.