Iranian insurance companies cover nearly $500 billion worth of risks, says Gholamreza Soleimani, president of the Central Insurance company of Iran (CII) – regulator of the insurance industry.
"Risks of almost all types in the country are covered by local firms, including reinsurance companies, insurance companies and the CII," he told a press conference. There are no foreign insurance companies in Iran.
US sanctions and major international reinsurance companies' refusal to do business with Iran has deprived the country of the ability to transfer normal trading major risks outside its borders and to top international players in the key sector.
Currently, two reinsurance companies operate in the local market, namely Amin Re and Iranian Re. A limited number of insurance firms have permits from the regulator to offer reinsurance. Experts say loopholes and poor regulations are depriving the reinsurance industry from playing its destined role.
Some Iranian insurance companies signed deals with major international peers following the lifting of economic sanctions in 2016. Saman Insurance Company's agreement with Munich Re, Mellat Insurance Company and CII’s deals with SCOR RE are two examples.
However, the agreements were suspended as a result of Donald Trump’s hostile decision in 2018 to pull the US out of the landmark nuclear deal Iran signed with the six world powers in 2015.
New Plans
The official added that premium per capita in Iran has reached 7.1 million rials "a far cry from the global average [$818]”.
The industry issued 80 million insurance policies during the last fiscal year that ended in March, mandatory vehicle policies accounted for the largest share.
"The payout ratio in auto insurance category was 109% during the last fiscal year," Soleimani said, "The ratio could decline if the government ratifies a proposal that allows setting premiums based on motorists’ driving record."
So far personal auto insurance policies are prices based on type and value of vehicle.
Third-party vehicle insurance and medical insurance categories together account for almost two-thirds of the industry's premium.
Insurers generated 66 trillion rials ($300 million) from life insurance policies sold in the last fiscal year (March 2019-20), indicating 42.3% increase compared to the year before.
Soleimani noted that 24 million Iranians have bought life insurance policies.
"We have two life insurance companies and there are plans to launch private pension funds so that the people can use their services besides existing pension funds," he said.
