Economy, Business And Markets

Life Insurance Gets Short Shrift

Life Insurance Gets Short Shrift
Life Insurance Gets Short Shrift

The latest report from the Central Insurance of Iran for March 21-April 20 suggests  that out of the $300-million premium income earned by insurance companies during the period, only $42million or 17% came from life insurance.

The meager share of life insurance policies in Iran stands in sharp contrast with global trends. According to the insurance almanac for 2013, out of the $4.6 trillion global insurance income, $2.6 trillion came from life insurance policies which account for around 56% of insurance revenues.  The annual report says that in Europe and North America, the share of life insurance policies is even higher, accounting for 65% and 75% of all insurances, respectively. In the same year, the report indicates that in Iran, life insurance accounted only for 9% of the total premium income.    

The stark differences in insurance trends in Iran and the rest of the world could be indicative of cultural differences.

SMT News reports that Iranians are largely negligent or unaware of the true benefits of insurance in safeguarding against unpredictable hazards that life throws one’s way. This lack of enthusiasm encompasses all kinds of insurance including fire and property insurance.

By tracking life insurance trends in recent years, however, it becomes clear that a change for the better has been underway.

While the share of life insurance in Iran was only 6% in 2006, it grew to 9.6% in 2009 and finally reached 17% this year, which marks 8% growth year-on-year. The figures could presage better days for the insurance industry in Iran.