Life insurance has become the main source of premium income for some private insurance companies, data released by the Central Insurance company of Iran (CII), the supervisory body of the sector, show.
Pasargad Insurance Company, affiliated with Bank Pasargad Iran, generated more than 62.4% of its premium from the life insurance segment in the last fiscal year that ended in March.
The company led the domestic life insurance market with 24.3% share of the total premium last year.
CII data also show that Karafarin Insurance, affiliated to Karafarin Bank, generated half of its premium income through selling life insurance policies
Life insurance was also the main income source for Saman Insurance Company, affiliated with Saman Bank during the said period with 47.5%. It posted 110% growth in the life insurance segment with 7.6% market share.
Premium from life insurance outstripped income from third-party vehicle insurance in the portfolios of Sarmad Insurance Company (31.6%), Ma Insurance Company (25%), and Novin Insurance Company (18.5%)
Middle East Life Insurance Company, affiliated to Middle East Bank, reported nearly 418% growth in its annual income, higher than all the other peers.
Iran Insurance Company (IIC), the sole state-owned insurance company in Iran, accounted for the second largest share from life insurance premium in the last fiscal year with 18.9%. The shares of life insurance in IIC's overall portfolio, however, remained low at 9.4%
Iran Insurance Company (IIC), the sole state-owned insurance company in Iran, accounted for the second largest share from life insurance premium in the last fiscal year with 18.9%. The shares of life insurance in IIC's overall portfolio, however, remained low at 9.4%.
Insurance companies generated 115 trillion rials ($4.11 billion) in premium income last year, posting 41% y/y growth. Life Insurance accounted for 15.8% of their portfolios last year.
Parliament had called on the sector to raise the bar and boost life insurance to 50% of the total revenue by the end of the Sixth Five-Year Economic Development Plan (2016-21) – apparently a tall order.
However, growth in life insurance turned out to be less than anticipated amid reservations about its sustainability during the brutal Covid pandemic. Households were and are less likely to be able to afford costly life insurance.
Insurers are making extra efforts to promote the sector. The CII recently reported increase in the number of agents specializing in life insurance by 12.9% reaching 44,300.
Thus far, two specialized life insurance companies are operating in the local market, namely Middle East Life Insurance and Baran Life Insurance. The number is expected to reach five as the regulator has granted license to three new life insurance firms. The two firms collectively account for 3.7% of the market.
