The Central Insurance company of Iran (CII), the state regulator of the industry, says it has launched a special unit to support insurtech startups.
Promoting insurance-related startups was discussed during a meeting between Majid Behzadpour, the CII director, and Sorena Sattari, vice president for science and technology affairs.
Behzadpour recalled issues related to the diversity of insurance services and said tech-based insurance service must be developed, way2pay.ir reported.
"We have established a workgroup at the CII, specifically for promoting innovation. Indeed a bright future awaits startups despite the regulator’s strict restrictions in the past on the entry of tech firms in the insurance sector."
CII has long called for innovation as a need to expand the penetration rate of insurers and improve quality. Bimeh-Dari Novin Magazine, a journal specializing in the sector, conducted research on the performance of insurers vis-à-vis innovation and found that innovative proposals approved by the CII reached 14 in the fiscal year to March 2019.
A review of CII approvals over 15 years shows that the average number of innovative insurance services barely exceeded five each year. The CII okayed 15 innovative plans during the period.
Most of the new programs are related to the vehicle, medical, liability and car accident categories.
In recent years hundreds of startups and knowledge-based companies have opened in Iran with some offering insurance services. These firms account for 96% of the total online sales and are recognized as knowledge enterprises by the government and have an estimated 5 trillion rials in investment.
The High Council of Insurance earlier ordered companies to acquire official permit from the CII for online sales. It announced a framework for regulating the activities of online insurance agents according to which an “Official Online Broker License" allows them to operate on behalf of the insurance companies, offer price comparisons and make online billings.
However, disputes have emerged over the collaboration process between the online platforms and the insurers.
Last June, the CII banned seven companies from selling third-party auto insurance because of their failure to meet CII norms and cutting ties with unauthorized applications.
Sorena Sattari welcomed the regulator's move to digitalize insurance policies and urged insurers to focus on smartification of insurance services.
"Smartification of processes is critical to preventing fraud in the sector," he said. "Setting up the innovation workgroup by the CII is constructive move."
The process of digitizing insurance procedures began in May 2020 when the CII ordered insurers to switch personal auto policies into electronic format. The measure was seen as a move to boosting the efficiency of insurance companies and encourage them to employ advanced technology.
