Most Iranian insurance companies managed to improve to level 1 in the fiscal 2020-2021 fiscal year, the Central Insurance company of Iran reported.
According to Risknews, except for Asmari Insurance Company, with a level 2 rate, all others were ranked in level 1, which means the companies are capable of meeting their financial commitments to policyholders.
The CII has compartmentalized insurance firms into different levels wherein higher levels indicate weaker solvency. Rankings are set depending on the key metric, the Solvency Margin Ratio (SMR). The metric is the capability to cover exposed risks.
Insurance companies with level 1 solvency ranking include Asia (SMR 133) , Dana (120) , Alborz (222), Parsian (155), Mellat (376), Saman (269) , Novin (188), Pasragad (334), Karafarin (263), Kowsar (155), Mihan (101), Ma (203), Ta’avon (121), Sarmad (171), Omid (123), Iran Moien (250), Hekmat Saba (100), Tejart Nau (163) Dey (208), Iranian Re (663), Razi (238), and Amin Re (612).
Iran Insurance Company, the largest and the only state-owned firm in Iran, managed to elevate its SMR from 26 in 2017-18 to 109 in fiscal 2020-21.
The IIC board recently approved capital increase by 154.971 trillion rials ($600 million) via revaluation of its fixed assets. This should boost its capital from 34.2 trillion rials ($132m) to 189 trillion rials ($730m).
So far 33 insurance companies operate in Iran including offshore firms and reinsurance companies.
The number of insurers, including reinsurance, life insurance and general insurance companies, is likely to reach 46 with the regulator saying that 13 new firms are in the pipeline.
The supervisory body 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 are also expected to make debut soon.
However, market observers say the industry does not have the capacity for more players, at least not in the present difficult economic conditions.
Responding to reservations, the CII head has said, "Licenses were issued for applications compatible with our policies. We have approved some reinsurance companies, specialized life insurance companies and general insurance firms with verifiable innovative plans to empower the industry."
