Iran Government Approves Major Insurance Divestiture

The Cabinet of President Hassan Rouhani’s administration approved a measure based on which the government will sell its remaining shares in three major insurance companies which–barring Iran Insurance Company–are the only firms in which the government still holds a stake.

All remaining shares belonging to the government in Asia Insurance Company, Alborz Insurance Company and Dana Insurance Company are to be divested.

After rates are devised by a specialized council, the Iranian Privatization Company will float them on the capital market, according to the official news portal of the Presidential Office, IBENA reported.

Minister of Economic Affairs and Finance Masoud Karbasian had heralded the divestiture of the government’s remaining shares in the three companies in the 24th National Conference on Insurance and Development held in Tehran on Dec. 4.

“The privatization of insurance companies is a must and as I personally believe that the three insurance companies owned by the government [Asia, Alborz and Dana] must be divested, I will vigorously follow up this process,” he told the audience at the biggest Iranian insurance event of the year held to mark National Insurance Day.

Asia Insurance Company is 20% owned by the government while the government’s share in Alborz Insurance Company stands around 17%.

According to Dana Insurance Company’s chief executive, about 30% of the company’s shares are owned by the government through the Social Security Organization and the Social Security Investment Company.

If the three aforementioned insurance firms are fully ceded to the private sector, Iran Insurance Company will remain the sole state-owned insurer. However, that will not be remotely equal to the government forfeiting its share in insurance companies, as Iran Insurance Company alone earns about 60% of all premium incomes.