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EghtesadOnline: The Central Insurance company of Iran, the body in charge of supervising the industry, has released the long-awaited annual report on the performance of the insurance sector in the fiscal year that ended in March 2019.

Iranian insurers generated 454.4 trillion rials ($10.8 billion) in premiums during the year -- up 33.5% compared to a year ago.

More than 61.3 million insurance policies were sold in the 12 months, 4.5% higher year-on-year.

The Iran Insurance Company, the sole state-owned insurer, accounted for 34.5% of the total premium with 156 trillion rials. It sold more than 27.4 million policies, Financial Tribune reported.

Privatized firms accounted for the largest portion of the remaining shares. Asia Insurance was the leading private insurer in terms of premiums accounting for  9.8% of the market. Dana and Alborz insurance firms were next with 6.9% and 6.5%, respectively. 

Insurers sold 61.3 million policies last year, 4.5% higher than the previous year's 58.6 million. 

The industry's total payouts amounted to 288.6 trillion rials, 32% higher than the 218.2 trillion rials paid the year before. The total number of claims, however, decreased by 3.1%, to reach 57.4 million.

IIC accounted for more than 60% of total payouts. Backed by the government, IIC has always offered easier terms for paying claims to policyholders. This is considered unfair advantage by the private insurers. The payout ratio of CII reached 89.7%. 

Mohammad Rezaei, a board member and acting director of the company, said restricting IIC operations in the market is unhelpful and unwanted. 

IIC's larger share is beneficial for the market, he said last week. 

Back in 2016, new regulations were passed to put an end to a practice common among major insurers, especially the sate-owned giant Iran Insurance Company, selling Personal Auto Policies at prices 25% to 35% lower than those set by the Supreme Council of Insurance.

Third-party auto policies accounted for 47% of IIC's portfolio last year. The payout ratio of the company in this category was 114%.


Bane of the Industry  

As in previous years, third-party auto insurance and medical insurance had the largest share in the industry's total premiums, 32.3% and 26.2%, respectively. 

The two sectors have almost always negatively impacted the performance of the insurance industry as a whole. There have been concerted efforts to shift the focus of insurers more toward other categories, especially life insurance, where they apparently have better prospects to grow and expand. 

Medical insurance category's payout ratio was 151% during the last Iranian year. Third-party auto category also recorded a payout ratio of 113.9%. 

CII data also indicates 16.5% growth in third-party auto insurance category income and 43.6% increase in premiums of the medical insurance category. 

The CII report indicates 3% drop in total number of medical insurance policies in the last fiscal year.

Meanwhile, the sharp increase in auto and auto parts prices and medical costs are said to be among key factors impacting the performance of insurers in the two loss-making categories. 



Promising Categories


The share of life insurance in the total premium reached 14.5%. It earned 42.3% more revenue during the last fiscal.

Private firms still dominate the less popular life insurance market, with more than 80% share. According to the CII report, life insurance accounts for 17.9% of private insurance companies' portfolio.

Middle East Life Insurance Company, the only specialized insurance firm in Iran, has not managed to better its portfolio yet, as the company's share was a meager 0.2% from the life insurance market. 

Transportation insurance, auto body insurance, marine insurance and oil and energy categories recorded significant growth in the annual premiums, though their share in the industry's performance has remained negligible.


Growth Insurers Iran Central Insurance company of Iran Performance Premium Insurance Sector Annual Report