The High Council of Insurance, the top regulatory body of Iran insurance industry, is expected to grant operational license to a new reinsurance company in the near future.
Pars Reinsurance Company is affiliated to one of the major insurance firms, Risknews reported without providing further details.
The company will be the fourth reinsurance company in Iran. Amin Re, owned by the government and Iranian RE, affiliated to Bank Pasargad Iran were the only reinsurance firms so far.
However, reimposition of sanctions by the US along with growing demand for reinsurance, prompted investors and insurers to establish new companies.
Saman Reinsurance Company has received a license from the regulator and will make a debut soon. It will be Iran's third and the second affiliated to Saman Bank.
New Insurers
The Central Insurance company of Iran has welcomed establishment of new firms. "Investors are interested in starting insurance companies. Newcomers will help boost competitiveness" in the gradually growing industry, Gholamreza Soleimani was quoted as saying by the CII website.
Currently, 33 insurance companies operate in Iran including offshore firms and reinsurance companies.
Unlike the CII boss, market observers say the industry does not have capacity for more players, at least not in the present economic climate.
In the past four years, only two general insurance companies were granted permits, namely Tejarat-Nou Insurance Company and Hekmat Saba Insurance Company.
Two specialized insurance companies have also entered the market, namely Middle East Life Insurance Company and Baran Life Insurance Company. Promoting specialized insurance companies is one of the measures crafted by the CII to shift insurers' focus from auto and medical insurance to innovative segments, especially life insurance that until the recent past were not popular.
According to a directive issued by the government and CII-affiliated High Council of Insurance, the minimum required capital for establishing an insurance firm is one trillion rials ($22.7 million).
Based on the directive, the minimum capital required to sell non-life insurance policies is 300 billion rials ($6.81 million), life policies 200 billion rials ($4.5m) and miscellaneous 500 billion rials ($11.36m). This is while those wanting to set up reinsurance firms must show a minimum capital of 2.5 trillion rials ($56.8m).
Domestic insurers generated 210 trillion rials ($807 m) by selling policies in four months to July 22 and 105 trillion rials ($403m) was paid in claims. Personal vehicle insurance (known as third-party insurance) accounted for 39% of the total premium.
