Best-Performing Iranian Insurers Announced

The Central Insurance of Iran has finalized assessing insurance firms’ solvency margin ratio for the current fiscal year (started March 20, 2016), according to which 17 out of 26 firms have been deemed fully capable of meeting their commitments to policyholders.

The CII has called on the public to look to insurers’ SMR as evidence for the firms' competence when purchasing insurance policies.

Iran Moein Insurance, one of a handful of firms authorized for operation in free trade zones, tops the list of general insurance firms in this area. Its SMR is 589% for the current fiscal year. The firm is affiliated with Iran Insurance Company and has had a successful performance in life insurance category.

Sarmad Insurance, affiliated with Bank Saderat Iran, has the highest SMR among mainland insurance firms at 366% for the current fiscal year (ending on March 20, 2017). Mellat Insurance and Ma Insurance, both affiliated with Bank Mellat, followed with their SMR reaching 233% and 196% respectively.

The solvency margin ratio of Amin Re, also licensed for operating in FTZs, and Iranian Reinsurance, affiliated with Bank Pasargad Iran, were reported to have an SMR of 1,636% and 738% respectively. The two companies are the only reinsurance firms in Iran.

Multiple-Tier System

The CII’s Office for Financial Supervision has divided insurers into different levels in terms of their solvency ratios. It has listed five insurers in "Level 2", requiring them to develop three-year plans for fixing their current financial state. The regulator is considering allowing these firms to raise their capital.

Dana Insurance, one of the major privatized insurers, is placed in Level 2. Its SMR is 86% according to the CII. Day Insurance, affiliated with Bank Day, is also in the same category. The firm used to be in Level 4 last year. The improvement comes after CII lowered insurer’s reserves requirement last year.

Mihan Insurance is the only firm placed in Level 3 with an SMR of 58%. Mihan’s SMR has increased by 15% compared with the previous year. The regulator has tasked the firm with devising a detailed two-year plan for enhancing its financial status. Raising capital is a must for Mihan.  

Iran Insurance Company, the only fully state-owned firm operating in the market, and Hafez Insurance, licensed for operating in FTZs, are firms with the lowest solvency margin ratio. The CII has tasked them with developing a one-year reform plan. They need to reduce their sales, cut executive compensation and stop investing in low-profit businesses.

Earlier on Wednesday, Iran Insurance Company announced that it is planning to spin itself off into several entities as part of its reform plans. The planned ''holding company'' will consist of four specialized firms, namely a life insurance company, a firm for non-life insurances, a reinsurance company and one dedicated to investments.

The CII notes that assessments for each year is based on insurers’ performance in the previous year, therefore newly established insurance firms are not included in the list.