The insurance industry was unable to meet the targets defined in the Sixth Five-Year Economic Development Plan (2016-2021), despite reasonable growth.
According to a report by IBENA, the sector was supposed to increase the share of life insurance annual premium income by 50%. This segment was 15.3% higher by the end of the plan period.
Data show the share of life insurance in the industry’s collective portfolio increased 0.4% on average.
A key goal of the national plan was to boost the sustainability of insurance company income and improve their financial clout.
The industry regulator, the Central Insurance company of Iran (CII), has taken measures to fulfill the targets, namely promoting specialized life insurance companies and giving more leeway to insurers to improve their investment using money from selling life insurance.
All said, the sector failed to register higher growth due to several reasons.
Mehrdad Rezaei, head of the CII department for supervising life insurance, said the sector has enough potential for attracting clients despite the existing hurdles.
“Generally, the public is showing more enthusiasm in life insurance. However, insurance companies need to sharpen their focus on innovation to address market demand,” Rezaei said.
Insurance and life insurance firms have plans to boost sales, he noted.
The regulator has been trying to promote retirement insurance policies as it can help plug gaps in state-run pension funds, he said, adding that policymakers now have no plans to oblige the public to buy retirement insurance.
Rezaei said the CII received more than 100 complaints related to life insurance issues in the first ten months of last year.
Most complaints were related to malpractices by life insurance firms’ sales network. “Policyholders said the services they receive from insurance companies are far below expectations.”
He added that “Policyholders are given almost zero information about the policies they buy, whereas the sales networks have all the details. Insurers must provide buyers complete and authentic information about the policy terms and conditions.”
Other complaints were related to the unacceptable manner of payouts by the insurance companies.
The FYDP had obliged insurance authorities to take appropriate measures to expand the penetration rate of the industry by 7% during the five years.
IBENA data show average annual growth of 0.2% in the penetration rate of insurance industry. It was 2.52% by the end of the plan period.
