14 Million Iranians Have Life Insurance Coverage

The life insurance portfolio of insurers and its potentials have improved, in light of the number of people currently benefitting from its coverage, the head of the Central Insurance of Iran, the insurance industry’s sole regulator, said on Tuesday.

“At present, about 14.2 million Iranians have life insurance policies while 2.5 million of them were covered last year,” Abdolnasser Hemmati also told a conference on life insurance and future of the industry in Tehran, IRNA reported.

Iran currently has a population of over 80 million, which indicates that only about 18% of them have life insurance policies.

According to Hemmati, the past four years have witnessed the most rapid growth in the portfolio of life insurance policies, as their share in the overall Iranian insurance market stood at 7.8% five years ago and has now reached 13.4%.

Commenting on this growth, he referred to supply changes in the insurance industry, coupled with higher demand, adding that the qualitative and quantitative structures of selling life insurance policies have improved.

While only 16% of insurance agents were active in life insurance six years ago, that number has now risen to about 25% and 5% of that growth have materialized in the past two fiscal years.

“The share of life insurance stands above 20% [of the overall portfolio] in 10 insurance companies while the share has exceeded 50% in four of them,” he said.

  Low Capital Insurers to Merge

The CII chief also said insurance companies that fail to increase their capital base in line with the Cabinet’s approval by the end of the current fiscal in March will be merged or face restrictions.

“Insurers that do not comply with the new requirements will be either merged or prevented from conducting some of their activities,” he warned.

According to the latest directive of the Cabinet and the CII-affiliated High Council of Insurance, the minimum required capital for establishing an insurance firm is 1 trillion rials ($22.72 million).

Based on the directive, the minimum capital required for offering non-life policies has been set at 300 billion rials ($6.81 million), life policies at 200 billion rials ($4.54 million) and mixed policies at 500 billion rials ($11.36 million). This is while entities offering reinsurance services would require a capital base of at least 2.5 trillion rials ($56.81 million).