EghtesadOnline: The Central Insurance company of Iran's recently updated list of insurers authorized to accept reinsurance cover, shows Alborz Insurance Company, one of the big four private firms in Iran, has been added to the list.
The list now contains names of six insurance companies, namely Iran Insurance Company, Iran Moein Insurance, Pasargad Insurance, Parsian Insurance, Mellat Insurance and Alborz. Apart from these firms, Amin Re and Iranian Re are also two specialized reinsurance companies operating in Iran.
The state-run IIC was again atop with 11.6 trillion rials ($76 million) reinsurance cover followed by the Tehran-based Alborz, which is allowed to accept risk to the tune of 1.874 trillion rials, Financial Tribune reported.
Parsian Insurance, affiliated to Parsian Bank, and Pasargad Insurance, affiliated to Pasargad Iran, come after with reinsurance cap of 1.3 trillion rials and 1.13 trillion rials, respectively.
Bank Mellat's affiliated insurance company, Mellat Insurance Company ranked fourth with 723.5 billion rials.
As the last company allowed in the reinsurance matrix, Iran Moein, affiliated to Iran Insurance Company, was allowed by the CII to accept up to 478.5 billion rials in reinsurance cover.
Amin Re has boosted its reinsurance potential compared to the previous rating and is now capable of handling reinsurance coverage up to 1.237 trillion rials.
Iranian Re, affiliated to Bank Pasargad Iran, is allowed to cover up to 728.3 billion rials, unchanged compared with the previous update.
New US sanctions and major reinsurance companies' aversion to play their proper role has deprived the nation of the ability to transfer major risks outside its borders and to international players.
Two reinsurance companies operate in the local market. A limited number of insurance firms have also received permission from the regulator to offer reinsurance cover.
Experts say deficiencies in regulations are depriving the reinsurance industry to play its destined role. Informed sources say limitations in reinsurance services have resulted in lower demand for insurance in some categories like transport.
Some say that the CII should push the two specialized reinsurance firms so that they play a more effective role in the market.
However, from the regulator's point of view, efforts should focus on insurance business. Firms with restricted capital and limited capacity need to be cautious when selling insurance policies. Moreover, smaller firms could work closer and create consortiums to share the risks.
Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties in some form of agreement to reduce the likelihood of paying large amounts emanating from an insurance claim.
It allows insurers to remain solvent by recovering some or all the amounts paid to claimants.
CII allows government supervision over the insurance sector and is responsible for regulating, assisting and expanding the insurance industry.