A recent comparative study of insurance companies shows firms affiliated to bank-affiliated companies had a better peformance
A recent comparative study of insurance companies showe that companies affiliated to banks managed to outperform their peers in the last fiscal year.
The study was conducted by Tejarat-Nou Insurance Company, based on the insurers' financial reports publicly available on Codal platform, after the state-owned giant Iran Insurance Company, released its annual statement last week.
Saman Insurance Company, affiliated to Saman Bank, topped the list of insurance companies in terms of net profit ratio during the fiscal year to March 21, 2021. The company had a net profit margin of 53%.
Pasargad Insurance Company, affiliated to Bank Pasargad Iran, came after with 51%, followed by Alborz Insurance, privatized, with 38%.
In terms of return on investment, Tejarat-Nou Insurance, affiliated with Tejarat Bank, topped the list with 21%. Alborz Insurance, Saman Insurance and Pasargad Insurance came after with 19% return on investments during the period.
Dey Insurance, affiliated with Dey Bank, recorded the lowest cost ratio among insurance companies – 5%. Alborz came after with 6% followed by Mellat Insurance (affiliated to Bank Mellat) 7%.
Cost ratio is the operating expenses and claims adjustment expenses divided by premiums.
Pasargad also outperformed other firms in terms of loss ratio last year, paying 24% of its generated premiums in claims. Hekmat Saba Insurance ranked after with 38%. The insurance was affiliated with the Bank Hekmat Iranian which was merged with Bank Sepah last year.
Karafarin Insurance, affiliated with Karafarin Bank, came third with 40%.
The insurer also outperformed others in terms of the total debt to assets ratio during the last fiscal year, recording a ratio of 10%. Pasargad came after with 13% followed by MA Insurance, formerly affiliated to Bank Mellat, with 16%.
Currently, 33 insurance companies operate in the Iranian market, including general insurance, life insurance and reinsurance companies. The number is likely to reach 46 with the regulator saying that 13 new firms are in the pipeline.
The Central Insurance company of Iran, the supervisory body of the industry, has granted preliminary permission to two life insurance companies, namely Karizma Life Insurance and Hamerz Life Insurance; four reinsurance companies, Saman Reinsurance, Pars Reinsurance, Tehran Reinsurance and Raya Reinsurance; and two general insurance firms, Pardis insurance and Farda Insurance.
The regulator is also expected to issue initial permission for the establishment of five other firms, namely Etemad Insurance, Bamdad Insurance, Soroush Insurance, Persian Reinsurance, and Isatis Life Insurance companies.
Denying concerns of stakeholders and experts, the CII refers to its studies in which the market reportedly has the capacity for 56 firms.
