Marine Insurance Reports Progress
EghtesadOnline: Iranian insurance companies generated 270 billion rials ($1.35 million) selling marine insurance policies in the first two months of current fiscal year (started March 2020) to register 65% growth compared to the same period last year.
Data released by the Central Insurance company of Iran (CII) shows that despite growth, marine insurance share in the insurance industry’s total premiums is less than 1%.
Insurance companies collectively generated 86 trillion rials ($323 million) in premium in the first two months (March 20-May 20) of the current fiscal year, marking 31.4% growth compared to the same period last year.
Regarding claims, CII data shows collective payout amounted to 49 billion rials during the two months under the review, accounting for 0.12% of the total claims.
CII data also indicated a year-on-year jump of 12.2% in payouts, as insurance companies paid 42 trillion rials in claims.
Even though payouts in marine insurance are small, it reported a sharp increase of 237% compared to the same period last year. Average growth in payout of all insurance types is 12.5%.
The payout ratio of marine insurance was 18.16%, slightly higher than the ratio during the first two months of the previous fiscal year.
Domestic insurance companies cover losses accrued to the body of vessels along with the liabilities.
Data from the Central Insurance company of Iran indicate that the industry has been boosting profit and cutting loss ratio in the past 10 years covering ships and marine transportation.
Fiscal 2013-14 was the biggest year for Iran’s shipping insurance when the loss ratio was 27% and the highest premium in the industry’s history reached 2.02 trillion rials.
Insurance premium from ships was 1.4 trillion rials in fiscal 2014-15 and rose to 1.5 trillion rials the year after, whereas loss ratio those 2 years was 74% and 87% respectively.
In 2017-18, 1.3 trillion rials was generated in premiums and the loss ratio decreased significantly to 21%.
Sanctions are a key affecting factor when it comes to marine insurance. Iranian vessels got cover from international insurance companies after the lifting of the sanctions in 2016. However, the task was returned to domestic firms after the new economic, banking and shipping sanctions imposed by the US in 2018 and are still in place.