The Central Insurance company of Iran (CII), the regulatory body, has issued the operational license for Charisma Life Insurance Company, the third in Iran.
A report seen on Risknews website said the company started selling insurance on December 3.
Thus far, two life insurance companies were operating in the local market, namely Middle East Life Insurance and Baran Life Insurance -- collectively accounting for 3.7% of the market.
The number of firms in this segment is set to reach five as the regulator has granted license to two other firms, namely Hamerz Life Insurance Company and Isatis Life Insurance Company.
Middle East Life Insurance Company, affiliated to Middle East Bank, recently reported 418% growth in its annual income. Life insurance has become the main source of income for some private insurance companies.
Pasargad Insurance Company, affiliated to Bank Pasargad, generated more than 62.4% of its premium from the life insurance segment in the last fiscal year that ended in March.
The company led the local life insurance market with 24.3% share of total premium last year.
CII data show that Karafarin Insurance, affiliated to Karafarin Bank, generated half of its income from life insurance.
Life insurance was the main source of income for Saman Insurance Company affiliated to Saman Bank in the period with 47.5%. It reported 110% growth in the life insurance sector with 7.6% market share.
Premium from life insurance outstripped income from third-party vehicle insurance in the portfolios of Sarmad Insurance Company (31.6%), Ma Insurance Company (25%), and Novin Insurance Company (18.5%).
Insurance companies generated 115 trillion rials ($4.11 billion) in premium income last year, posting 41% y/y growth. Life Insurance accounted for 15.8% of their portfolios last year.
Iran Insurance Company (IIC), the sole state-owned insurance company, had the second largest share from life insurance premium in the last fiscal year with 18.9%. The share of life insurance in IIC's overall portfolio, however, remained low at 9.4%.
Reluctant Regulator
The CII has been reluctant to increase the space for new players for years and restricted licensing to specialized firms, especially life insurance.
Measures crafted by the CII to shift insurers' focus from auto and medical insurance to other potentially profitable and innovative segments, especially life insurance, have so far not produced the desired results.
However, following a recent shift in the regulator's policies the number of insurers, including reinsurance, life insurance and general insurance companies, is expected to reach 46.
The CII now says newcomers on radar to increase the penetration rate and enhance quality, referring to studies that said the domestic insurance industry has the capacity for 56 companies.
This is while market observers claim otherwise, saying that the industry does not have the capacity for more players, at least not in the present difficult economic climate.
