The Central Insurance company of Iran, the industry’s regulator, says it has prioritized licensing to fully digital insurance companies.
“There is some disagreement between experts and policymakers over increasing the number of insurance companies…Our policy is to focus on specialized insurers, such as life insurance, reinsurance and companies that are fully digital,” Majid Mashalchi, the CII vice-president was quoted as saying by Shada.ir.
“As the regulator of the insurance sector we are concentrating on easing access to services, policyholders’ satisfaction, tech-based firms and meaningful interaction between insurers and policyholders,” Mashalchi said.
The regulator granted an operating license to one more general insurance company, Farda Smart Insurance Company, to offer digital service.
In a note seen on Risknews website, the CII said that it expects Farda to focus on developing smart products with the use advanced technology such as artificial intelligence, and offer innovative solutions.
"The company is expected to expand into deprived areas, create online and smart supervisory mechanisms, curb fraud and human error, satisfy policyholders and help the insurance industry embrace innovation," the note said.
Over the years the CII has hardly made a secret of its reluctance to increase the space for new players and has restricted licensing to specialized firms, especially life insurance.
Measures crafted by the CII to shift insurers' focus from auto and medical insurance (two main moneymakers) to other emerging innovative segments, especially life insurance, have so far not produced the desired results.
However, following a recent shift in the regulator's policies the number of insurers, including reinsurance, life insurance and general insurance companies, is expected to increase.
The CII now says newcomers are on the radar to increase the penetration rate and enhance quality, referring to studies that say the domestic insurance industry has the capacity for 56 companies from the present 46.
This is while market observers claim otherwise, saying that the industry does not have the capacity for more players, at least not in the present difficult economic climate.
The regulator recently issued license for four new reinsurance companies, namely Saman Re, Tehran Re, Moein Re, and Pars Ava Re; one life insurance company, Charisma Life Insurance Company, and one general insurance company, Pardis Insurance Company.
It is expected to issue permission for the establishment of more firms, namely Etemad Insurance, Bamdad Insurance, Soroush Insurance, Raya Reinsurance, Hamerz Life Insurance and Isatis Life Insurance.
Cyber Insurance
Elaborating on other CII programs, Mashalchi referred to cybercrime insurance packages saying that a number of insurance companies have already started covering risks related to cybercrime and risks related to online outlets.
However, regarding losses caused by disruption in the internet access in recent months the senior official said, “The CII is not yet tasked to work on the issue…No funding has been allocated to help cover the losses.”
Insuring companies against cyberattacks has become a common service in the global insurance industry, but Iran’s insurance sector so far has lags far behind.
Professionals say the insurers and Iranian companies are to blame for the sector’s failure to address hacking. So long as there is no demand for a product, it will not be produced but insurers can spur demand by devising and promoting such products.
The regulator of Iran’s fast growing insurance industry is working on policy to help safeguard bank accounts against cyberattacks.
The plan seeks to protect policyholders against phishing scams. The planned insurance cover would include risks related to digital banking, financial data security, unprocessed payment transactions, cyber scams and phishing.
