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EghtesadOnline: Insurance companies are still facing hefty medical insurance bills related to the coronavirus pandemic. Latest figures show 83.8% growth in medical insurance payouts during the first 11 months of the calendar year that ends on March 20.

The Central Insurance company of Iran said the medical insurance segment now tops the list in terms of share of  payouts alone accounting for 195 trillion rials ($752 million) or 36% of the total. 

Insurers collectively paid for 47.4 million cases during the  period 93% of which were for medical insurance policy holders. 

Despite the growth in medical insurance premium income and increase in policies sold during the period under the review, the loss ratio of the category was 106%, which means that insurers paid more than what they earned in the medical insurance category. 

Medical insurance premium increased 28% to reach 184.1 trillion rials ($708m) during the period accounting for 18.32% of the total premium. 

Insurers reported 178% growth in total medical insurance policies sold reaching 1.06 million in 11 months. 

According to the CII, pandemic-related bills account for 6% of total medical insurance payouts. Insurers reportedly paid 16.7 trillion rials ($63m) in Covid-related medical bills since the outbreak of the pandemic in February 2020. 

Since the early days of Covid, insurance companies were told to cover all expenses of policyholders infected with the brutl disease and expand the scope of insurance cover to include PRC tests.

Despite its destructive impact, insurers see the pandemic as a rare development that allows them to burnish their credentials with customers who rightly complain about the strange practices, mainly of expensive private hospitals, in demanding full payment of bills and refusing to deal with the bureaucracy of insurance companies and other hassles.

According to the Health Ministry, the pandemic has cut short 138,260 lives and affected almost 7.1 million Iranians.

More than 25 million Iranians have medical insurance.


Industry's Portfolio

Insurance companies in Iran generated 1,005 trillion rials ($3.86 billion) from selling 63 million policies during the 11 months to February 21 – up 38.7% in premium and 4% in the total number of policies sold. 

Data released by the CII show that third-party auto policies again accounted for the largest share of the premium with nearly one-third (34.8%) of the total income. 

Premium from third-party auto policies reached 350 trillion rials ($1.34 billion), up 46.7% on the same period last year. 

The contribution of life insurance in insurers' portfolio was 15.97% following concerted efforts to promote life insurance among the public. The category generated 160 trillion rials ($617m) during the said period, up 43.5% year-on-year. 

Total payout by the sector was 540 trillion rials ($2.07 billion) during the period, 45% higher compared to the same time last year. 

Third party auto payouts accounted for 32.4% of the total payout. Nearly 175.1 trillion rials ($673m) was paid to policyholders to compensate losses in this category. 

Payout ratio of the industry was reported at 53.78%, indicating 2.37 percentage points increase on the corresponding period last year.  

Loss ratio and combined ratio are used to determine the profitability of an insurance company. The loss ratio measures total incurred loss in relation to the total collected insurance premium, while combined ratio measures the incurred loss plus expenses in relation to the total premium.


Medical Insurers