Insurance companies in Iran managed to improve their solvency margin ratio in the last fiscal year (ended March) to acceptable levels, an official with the Central Insurance company of Iran, the regulatory body of the sector, said.
“The CII has been working closely with low-solvency insurance firms. They were required to submit plans for improving their financial status and the measures were supervised by the CII.
As a result, no insurance company had solvency lower than Level 2 last year,” Mofid Amini, the CII’s deputy for supervision, was quoted as saying by Payam-e-Bimeh news website.
The CII has compartmentalized insurance firms into different levels wherein higher levels indicate weaker solvency. The levels are determined depending on the key metric, the Solvency Margin Ratio (SMR). The metric is the capability to cover exposed risks.
According to Amini, a special committee was formed by the CII to review the financial status of insurance companies. “The number of companies with Level 1 solvency increased from 22 to 26. Three firms managed to improve their solvency from Level 2 to Level 1.”
Level 1 solvency means the company is capable of meeting all its financial commitments to policyholders.
The committee also looked into insurers’ reserves in the third-party vehicle insurance category, which resulted in 62% growth in the reserves, he added.
According to the CII, Middle East Life Insurance Company had the highest SMR among insurance companies up until March at 926%.
Insurance companies with Level 1 solvency ranking include Asia (SMR 120) , Dana (122) , Alborz (138), Parsian (129), Mellat (279), Saman (101) , Novin (114), Pasragad (219), Karafarin (177), Kowsar (126), Mihan (101), Ma (184), Taavon (159), Sarmad (147), Omid (117), Iran Moien (335), Asmary (138), Hekmat Saba (195), Tejart Nau (150) Dey (208), Iranian Re (436) and Amin Re (612).
Iran Insurance Company, which is the largest and the only state-owned firm in Iran, managed to elevate its SMR from 26 in 2017-18 to 93 in fiscal 2020-21.
The IIC board recently approved capital increase by 154.971 trillion rials ($600 million) via revaluation of its fixed assets. This will increase its capital from 34.2 trillion rials ($132m) to 189 trillion rials ($730m).
