The Central Insurance company of Iran (CII) has published a report on the risk retention capacity of domestic insurers adding three new companies to the list.
According to the CII website, the state-owned Iran Insurance Company tops the list and can now handle 51.13 trillion rials ($139.7 million) in risks in different categories.
Pasargad Insurance Company, affiliated to Bank Pasargad, is second with 13.8 trillion rials ($37.7m) worth of risks.
Asia Insurance Company is next with 12.64 trillion rials ($34.5 m) followed by Dana Insurance Company at 10.17 trillion rials ($27.7m).
Alborz Insurance Company, Mellat, Kowsar and Parsian insurance are the other insurers with acceptable risk retaining capacity.
Mihan Insurance Company, Hafez Insurance Company and the newly established Charisma Life Insurance Company are at the lower end of the list.
The latest risk retention capacity report is based on the balance sheets of insurers released on December 11.
The regulator of the insurance industry increased the risk retention capacity for Mellat Insurance Company and cut that of Sina Insurance Co.
Tehran RE, Avaye Pars Reinsurance Company and Charisma Life Insurance Company were added to the list after their recent debut.
Risk retention in the insurance industry refers to the amount of risk that an insurance company is willing to take on for a policy, risk or group of risks.
The more risk a company assumes by underwriting new insurance, the more premium it collects and invests. When an insurer accepts additional hazards it also increases the possibility of insolvency.
A company's risk retention capacity, or the maximum amount of acceptable risk, is a crucial component in its overall operations.
The CII figures also include the capacity of reinsurance companies as per which Iran Moein Reinsurance Company is in the lead with permitted risk capacity of 2.55 trillion rials ($7.3m).
Iran Moein recently got permission from the regulator to shift away from a general insurance company to reinsurance business.
Iranian Re, affiliated to Bank Pasargad Iran wasnext with 2.43 trillion rials ($7m), followed by Amin Re 2.14 trillion rials ($6.1m).
Avaye Pars Reinsurance has been allowed to accept up to 700 billion rials ($2 million) in risks and Tehran Re 500 billion rials ($1.4m).
The recently founded Saman Re is allowed to accept risk of no more than 250 billion rials ($718,000), the lowest in the market.
Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to other parties in some form of agreement to reduce the likelihood of paying large amounts emanating from claims. It allows insurers to remain solvent by recovering some or all the amounts paid to claimants.
CII allows government supervision over the insurance sector and is responsible for regulating, assisting and expanding the key industry.
