Insurance and life insurance companies sold 7.14 million life insurance policies in the last Iranian year that ended in March, posting 4.5% growth compared with the year before.
The Central Insurance company of Iran said this segment accounted for 15.51% of industry's portfolio, the highest in history of Iran’s insurance industry.
Insurers generated 126.8 trillion rials selling life insurance policy -- 44.5% higher compared with the year before. Growth in the life insurance category comes amid the Covid-19 crisis.
The Insurance Research Institute had predicted higher risks in medical and life insurance categories as the deadly disease has led to a huge increase in medical costs.
Even though insurers' performance was not in accord with projections, there is doubt over the sustainability of life insurance premiums. Households are apparently less likely to be able to afford costly life insurance on a regular basis, which could add to the insurers’ pains in the not distant future.
It seems the CII's insistence on promoting life insurance along with insurers' interest in expanding their revenue base in this category had a key role in boosting the sector, despite the hardships.
Two specialized life insurance companies have 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.
The share of life insurance in the overall portfolio of the insurance industry is meager and it needs to grow faster to meet the targets outlined in national development plans.
Life insurance penetration rate in Iran is 0.3% comparatively much lower than the 4.2% and 3.3%, respectively, for advanced economies and the average life insurance penetration in the world.
