Hummers Life Insurance Company has received an operating license, making it the fourth specialized life insurance company in the Iranian market.
The license is issued by the Supreme Insurance Council, following its approval by the General Assembly of the Central Insurance Company of Iran.
According to Risknews, the license allows Hummers Life Insurance Company to engage in all life insurance fields.
Charisma Life Insurance Company was the third life insurance firm that started operations in December.
Earlier, two life insurance companies were operating in the local market, namely Middle East Life Insurance and Baran Life Insurance, which collectively accounted for 3.7% of the market.
The number of firms in this segment is set to reach five, as the regulator has granted license to another firm named Isatis Life Insurance Company.
Middle East Life Insurance Company, affiliated to Middle East Bank, recently reported 418% growth in its annual income. Life insurance has become the main source of income for some private insurance companies.
Pasargad Insurance Company, affiliated to Bank Pasargad, generated more than 62.4% of its premium from the life insurance segment in the last fiscal year (ended March 20, 2023).
Life insurance sector’s premium registered a 34.75% rise last year, though its contribution to the industry's portfolio was slightly lower than the year before, when it accounted for about 15.7% of total premium earned in the sector.
Insurance companies collectively sold 7.3 million life insurance policies, posting a 4.92% decline in the year before.
The regulator granted an operating license to one more general insurance company, Farda Smart Insurance Company, to offer digital service.
In a note posted on Risknews website, CII said it expects Farda to focus on developing smart products with the use of advanced technology such as artificial intelligence, and offer innovative solutions.
"The company is expected to expand into underdeveloped areas, create online and smart supervisory mechanisms, curb fraud and human error, satisfy policyholders and help the insurance industry embrace innovation," the note said.
Over the years, CII has hardly made a secret of its reluctance to increase the space for new players and restricted licensing to specialized firms, especially life insurance.
Measures crafted by the CII to shift insurers' focus from auto and medical insurance (two main moneymakers) to other emerging segments, especially life insurance, have so far not produced the desired results.
However, following a recent shift in the regulator's policies, the number of insurers, including reinsurance, life insurance and general insurance companies, is expected to increase.
CII now says newcomers are expected to increase the penetration rate and enhance quality, referring to studies that say the domestic insurance industry has the capacity for 56 companies from the present 46.
This is while market observers claim otherwise, saying that the industry does not have the capacity for more players, at least not in the current difficult economic climate.
The regulator recently issued license for four new reinsurance companies, namely Saman Re, Tehran Re, Moein Re and Pars Ava Re; one life insurance company, Charisma Life Insurance Company, and one general insurance company, Pardis Insurance Company.
It is expected to issue permits for the establishment of more firms, namely Etemad Insurance, Bamdad Insurance, Soroush Insurance, Raya Reinsurance and Isatis Life Insurance.
The parliament has called on the industry to boost life insurance revenue to 50% of the total revenue, which seems unlikely under the present economic conditions, market observers say.
