The Central Insurance company of Iran, the regulatory body of the industry, expects growth in insurance companies' premium income in the current fiscal year (ends March 2022), despite the hurdles faced by insurers.
"The sector managed to generate 820 trillion rials ($3.43 billion) during the previous fiscal year. This is projected to exceed 1,100 trillion rials ($4.3 billion), this year," Gholamreza Soleimani, the CII head was quoted as saying by Risknews during the CII's annual board meeting.
Soleimani said insurers can earn more if allowed to increase policy rates in concord with the rate of inflation. "Removing the cap for payouts in the third-party auto category could also help boost premium income."
As per law, insurers are obliged to compensate up to 2.2 billion rials in loss incurred by costly cars during road mishaps – like cars costing 2.2 billion rials and above in the current fiscal year that ends next March.
A proposal by the CII for removing the payout cap on third-party auto insurance loss of expensive cars has been approved by the government and sent to the parliament.
Iranian insurance companies generated 817.3 trillion rials ($3.43 billion) in premium income in the last fiscal year (March 2020-21) posting 37.8% growth on the year before.
Nearly one-third of the total was from selling third-party vehicle insurance. Insurance companies sold 24.7 million policies last year worth 274 trillion rials ($1.15 billion).
Third-party vehicle insurance is mandatory in Iran and car owners lacking this type of policy are fined.
This is while the CII has not yet released data on insurance companies' performance from the beginning of the current calendar year.
The CII chief commended insurance firms for supporting policyholders against the impact of Covid-19, in particular by expanding the coverage of medical insurance and by devising innovative solutions for businesses during the lockdown.
Medical insurance was the second major source. Companies sold 576,300 medical insurance policies making 156.4 trillion rials ($657 million) last year. The number of policies, however, showed an annual decline of 85.4%. But premium income of the category was 15% higher on the previous year.
Medical insurance payouts accounted for 27% or 118.1 trillion rials ($496m) of the total payouts up 18.7%. Insurers paid claims in more than 31 million cases in the medical category, up 50% y/y. The category accounted for 90% of the total number of claims during the year to March 2021.
Soleimani referred to plans for digitizing the insurance industry as one of the successful measures taken by the regulator, expressing the hope that the modernization would be complete by the yearend.
Delayed IIC Report
Iran Insurance Company (IIC) the largest in Iran and the only one owned by the government, is to publish its annual report for the first time in years.
As per law, the IIC is obliged to publish details of its performance every year. However, the company had been unwilling or unable to do so. The company is to release detail of its financial performance in the fiscal year to March 2020.
IIC alone had 31.5% of the total premium income last year. Total payout reached 436.7 trillion rials ($2b) up 30% compared to the year ago. Third-party vehicle insurance accounted for 40% of the total payout reaching 175.2 trillion rials ($800m) or 27.7% higher. IIC paid 33.2% of the total.
