The Central Insurance company of Iran, the body in charge of regulating the industry, announced that four new insurance companies will open soon
"Investors are interested in starting insurance firms. Newcomers will help boost competitiveness" in the gradually growing industry, Gholamreza Soleimani was quoted as saying by the CII website.
"One company has received operational license," he said without providing details. However, local media reported earlier that a new reinsurance company, Saman Reinsurance Company, has received got a license from the regulator and will make a debut soon. It will be Iran's third reinsurance company, and the second insurance firm affiliated to Saman Bank.
Currently, 33 insurance companies operate in Iran, including offshore firms and reinsurance companies.
Unlike the CII boss, market observers say the industry does not have the capacity for more players, at least not in the current climate.
Domestic insurers generated 210 trillion rials ($913 million) by selling policies in four months to July 22 and 105 trillion rials ($456m) was paid in claims. Personal vehicle insurance (known as third-party insurance) accounted for 39% of the total premium.
In the past four years, only two general insurance companies have been granted permits, namely Tejarat-Nou Insurance Company and Hekmat Saba Insurance Company.
Two specialized insurance companies have also entered the market, namely the Middle East Life Insurance Company and Baran Life Insurance Company. Promoting specialized insurance companies is one of the measures crafted by the CII to shift insurers' focus from auto and medical insurance to more profitable and innovative segments, especially life insurance, that have not been popular as expected.
According to a directive issued by the government and CII-affiliated High Council of Insurance, the minimum required capital for establishing an insurance firm is one trillion rials ($22.7 million).
Based on the directive, the minimum capital required to sell non-life insurance policies is 300 billion rials ($6.81 million), life policies 200 billion rials ($4.5 million) and miscellaneous policies 500 billion rials ($11.36 million). This is while those wanting to set up reinsurance firms must show a minimum capital of 2.5 trillion rials ($56.8 million).
