Iran Insurance Company, the largest player and the only firm owned by the government, will boost its capital by 200 trillion rials ($910 million).
According to Risknews, the measure was proposed by the regulator, the Central Insurance company of Iran (CII) and is expected to be approved soon.
The capital increase will be mainly through revaluation of the company’s fixed assets. According to the news website, the company is renovating several vacant properties considered for sale.
Digitizing procedures, increasing the number of appraisers specialized in third-party auto and medical insurance plus raising the efficiency of investments are also on the IIC agenda.
As the only government player in the market, IIC sells 46% of total third-party auto insurance policies and has a 60% share in the total payout for auto insurance.
In the last Iranian year that ended in March, IIC alone accounted for 31.5% of industry's total premium income and 33.2% of the total payout.
Iran’s insurance companies generated 817.3 trillion rials ($3.7 billion) in premium income last year (March 2020-21) up 37.8% compared to the year before.
Total payouts amounted to 436.7 trillion rials ($2b) during the year up 30% compared to one year ago. Third party vehicle insurance accounted for 40% of the total payouts reaching 175.2 trillion rials ($800m), up 27.7%.
The obvious monopoly of the state-owned giant is often challenged by other companies. IIC’s largesse in offering discounts on premium and claims is often seen as an unfair and against free competition.
This is not the first time IIC is boosting capital. In September 2019 the company announced that it was increasing capital from 34 trillion rials ($160 million) to 100 trillion rials ($470m).
By increasing its capital, Iran Insurance Company also aims to raise its solvency. The solvency of insurance companies - capability to cover exposed risks – is seen in numbers and larger figures indicate weaker solvency.
The state insurer has the weakest solvency among all its peers. Level 4 for IIC means that its ability to fulfill its commitments is over 10% and below 50%.
