Economy, Business And Markets

Insurance Industry Told to Do More With Less

Insurance Industry Told to Do More With Less Insurance Industry Told to Do More With Less

The number of insurance agents should be halved because 20,000 professional agents are more than enough for the insurance industry, said Masoud Hajjarian, managing director of the Professional Insurance Institute.

“Unfortunately, the Central Insurance company of Iran allowed insurance companies to employ as many as agents they wish. It is an embarrassment for the industry that many agents in smaller towns do not earn enough to pay for the insurance of their own employees,” the institute’s website quoted him as saying during PII’s annual meeting on Wednesday.

According to its website, the Professional Insurance Institute (PII) was established in 2012 to develop the professional potential of insurance industry. As a specialized insurance association, it brings together directors, managers and experienced staff from Iran’s insurance companies who are professionals and pioneers in the insurance and reinsurance sectors.

“We informed the insurance authorities about a certain insurance firm with insufficient capital contracting 2,000 agents within a year,” he said. “We cannot expect improvement in the insurance industry’s performance as long as capital adequacy issue remains unsolved.”

Professional insurers, with a limited number of agents can boost competition in the market, he added.

He opined that the government is trying to make up for its shortcomings in supervising the industry by increasing the capital adequacy of insurance firms. “Starting a new company now requires 2.5 trillion rials ($82.5 million) and such money is beyond what professional insurers can afford.”

However, Hussein Karim Khan Zand, a member of the institute, thinks that the industry needs about 300,000 agents. “The CII should delegate the job of qualifying agents to insurance companies and allow them to decide about the number of agents they need.”

Giving more authority to insurance companies would help make the sector more competitive, he added.

As per law, the CII, as the top supervisory body of the industry, is in charge of qualifying insurance agents and brokers – a function of written tests.

A total of 32,245 insurance agents are active and the Iran Insurance Company, as the sole state-owned insurer, alone has 8,550 agents.