The number of insurers in Iran, including reinsurance, life insurance and general insurance companies, is likely to reach 46 with the regulator saying that 13 new firms are getting ready to enter the market.
The Central Insurance company of Iran, the supervisory body of the industry, has granted preliminary permission to two life insurance companies, namely Karizma Life Insurance and Hamerz Life Insurance; four reinsurance companies, Saman Reinsurance, Pars Reinsurance, Tehran Reinsurance and Raya Reinsurance; and two general insurance firms, Pardis insurance and Farda Insurance, Mehdi Namanal Hosseini, head of the CII department for insurance firms, said.
Saman Reinsurance Company is about to start operation, he said during a public interview on Instagram.
The regulator is also expected to issue initial permission for the establishment of five other firms, namely Etemad Insurance, Bamdad Insurance, Soroush Insurance, Persian Reinsurance, and Isatis Life Insurance companies.
"In the past two years we received more than 50 requests for starting insurance companies," Namanal Hosseini said.
The CII has been reluctant to increase the number of insurance companies for years. Later it decided to restrict licensing to specialized firms, especially life insurance.
Measures crafted by the CII to shift insurers' focus from auto and medical insurance to other potentially profitable and innovative segments, especially life insurance, have so far not produced the desired results.
Revised Policy
However, over the past two years the CII revised its decision and has supported increasing the number of insurance companies.
Gholamreza Soleimani, the CII boss, has said more insurance companies are needed for increasing the penetration rate and enhancing quality.
"Studies show the domestic insurance industry has the capacity for 56 companies," he said. "The newcomers, however, should have strong financial prowess."
This is while, market observers say the industry does not have the capacity for more players, at least not in the present economic climate.
Responding to reservations, the CII head said, "Licenses were issued for applications compatible with our policies. We also have approved some reinsurance companies, specialized life insurance companies and general insurance firms with innovative plans to empower the industry."
So far 33 insurance companies operate in Iran including offshore firms and reinsurance companies.
Amin Re and Iranian Re are the two main specialized reinsurance companies. Middle East Life Insurance and Bara Life Insurance are two specialized firms.
As per the government regulations, the minimum capital for new insurance companies is two trillion rials ($8.7 million), according to a report seen on the government website earlier in the week.
The hurdles and challenges notwithstanding, the regulator expects growth in companies' premium income to reach 1,100 trillion rials ($4.3 billion) in the current fiscal year that ends in March 2022.
Total premium reported in the last calendar year was 820 trillion rials ($3.4b), more than one-third of which came from the mandatory third-party auto insurance.
It seems that by restricting new operational licenses to firms that offer innovative services, the CII wants to persuade insurers to come out of their comfort zone and compete with new players in offering more personalized, data-driven, innovative and quality service.
