Insurance companies paid 62.2 trillion rials ($207.3 million) to agents in the last fiscal year (ended March 2021), marking 44.2% growth compared to the year before.
The Central Insurance company of Iran, the supervisory body, published its annual report on the performance of insurance companies that shows 10.6% of their premium income was paid to agents during the year.
According to CII, insurance companies affiliated to banks relied more on their sales network for boosting revenue and rewarded agents with higher commissions.
Saman Insurance Company, affiliated to Saman Bank, was the most generous in sharing premium income with agents with a net commission ratio of 27.1%. The company paid more than 2 trillion rials ($6.6m) in commission, up 47.4% year-on-year.
The ratio measures the commission paid by a insurer against the net premium it earns. The higher the ratio, the higher is the commission payments.
Middle East Life Insurance Company, affiliated to Middle East Bank, ranked second in terms of net commission ratio last year with 21%. The company has 745 agents.
Pasargad Insurance Company, another bank-affiliate was next with a commission ratio of 15.3% during the said period. It gave 6.6 trillion rials ($22m) to its agents, 48.8% on the previous year.
Pasargad Insurance Company, affiliated to Bank Pasargad Iran, alone accounted for 41.1% of the agents in the country with 34,483 people.
Dey Insurance, with 13.4%, Arman insurance 12.6% and Karafarin Insurance Company 12.4% were the other firms ranked high in terms of the net commission ratio.
Iran Insurance Company, the sole state-owned company and the largest in the domestic market, paid 23.2 trillion rials ($77.3m) to 13,242 agents during the year. IIC's commission ratio stood at 10.2%. Tejarat-Nou Insurance Company had the lowest commission ratio at 6.3%.
Growing Numbers
The number of branches and agents increased in the last fiscal year. More than 83,900 insurance agents were active during the year -- 8.7% higher than the year before, the CII said. The number of agents working in the life insurance segment increased 12.9% to 44,300.
The growth came amid mounting health problems created by the Covid-19 pandemic, which clobbered most business including the key insurance sector.
As the industry gradually moves to innovate, the CII in May 2020 instructed insurers to transfer the process of sale, renewal, and claims of personal auto policies to an online platform.
Companies were required to provide agents and representatives access to online platforms to support their business.
However, the growth of startups is seen as a major hurdle in the way of insurance companies' sales network.
Earlier in September, the CII published the new framework, setting commission caps for agents and brokers selling insurance policies in the life and non-life categories.
Insurers opposed the move saying that the revised framework for calculating commission could hurt their earnings by a massive 25%.
The framework was revoked by the regulator in response to agents' complaints, and in line with plans to empower the sales network.
The CII says the sector needs to do more to grow and expand the sales network. The number of people working in sales network of insurance companies should increase to 400,000, it has said.
