The Central Insurance company of Iran has ordered insurance companies to convert before the end of the week all personal auto policies into electronic format.
Gholamreza Soleimani, the CII chief, sent a notification to insurance companies obliging them to create the infrastructure by May 21, CII public relations office said.
As per the order, all insurance companies must transfer the process of sale, renewal, and issuance loss payments of personal auto policies to an online platform.
After that policyholders will be provided access to their policy information and can receive insurance services without the obligation of having a printed copy of their policies.
The regulator noted that any personal auto policy must come with a ‘exclusive code’, which will be issued by the CII to confirm the authenticity of the insurance policy.
Third-party auto policies account for the largest portion of the Iran’s insurance industry’s premium, with nearly one-third of the annual income.
The new measure comes after Covid-19 prompted the insurance regulator and insurance companies to come up with innovative solutions to minimize the impact of the pandemic on their business and curb the spread of the deadly disease
Premium generated by selling third-party auto policies reached 179 trillion rials ($1.1 billion) in the first eleven months of the previous Iranian year (March 2019-February 2020), up 41% compared to the same period last year.
The new measure came after Covid-19 prompted the insurance regulator and companies to come up with innovative solutions to minimize the impact of the pandemic on their business and curb the spread of the deadly disease.
Digitalizing insurance data not only promotes the quality of services, it also provides insurers with valuable information.
Move towards digitalization opens new sources of information that can be used to create a multifaceted behavioral pattern for each client and determine his/her risk category.
By analyzing data from accidents, policyholder’s personal information, as well as third-party sources, insurers compartmentalize people into different risk groups to prevent fraud (in collecting claims) and optimize income.
Recent studies show that big data implementation results in 30% better access to insurance services, 40-70% cost savings, and 60% higher fraud detection.
Majority of Iranian insurance companies have been slow in innovating their business. Setting up a user-friendly platform for buyers in such a short time (four days) could be a major challenge for most companies.
However, any hesitation in the process could result in a decline in the companies' premium income simply because mandatory third-party auto policies are the largest source of income for most insurers.
