Iran's Insurance Premium Income Tops $2b

EghtesadOnline: The insurance industry has managed to earn 88.5 trillion rials ($2.3 billion) from premiums during the first four months of the current Iranian year (started March 21).

News ID: ۷۷۸۸۹۸

30 August 2017

According to new statistics released by the Central Insurance of Iran, the figure has registered a growth of 16.3% compared with the same period of last year.

Insurance firms sold 17.8 million insurance policies, registering a 27.1% increase annually.

Iran Insurance Company’s share, as the only state-owned insurer, had a share of 35.1%, well above other insurers, according to Financial Tribune.

Once again, the lion’s share of policy sales pertained to Personal Auto Policies (which is obligatory for drivers) and health insurance. The former and latter accounted for 39.78% and 23.04% of the firm’s insurance portfolio valued at 35.21 trillion rials ($923.4 million) and 17.40 trillion rials ($456.6 million) respectively.

The energy sector purchased 535 insurance policies worth 650.9 billion rials ($17 million), registering a 43.4% decline. The decline in the energy sector was the largest among all sectors.

Although the rise in the sale of policies could be a good sign for the insurance industry, the 32.2% increase in the number of paid claims (12.5 million) is somehow alarming.

According to the data, Iranian insurance firms generated 14.25 trillion rials ($373.7 million) from selling life policies.

The insurance companies paid a total of 54.9 trillion rials ($1.4 billion) for losses during the aforementioned period.

The two categories, which received the major part of payouts, were PAP and health sectors, accounting for 35.28% and 38.52% of the total amount respectively.

Another hallmark of the figures is the amount of payout for fire incidents. The figure stood at 1.4 trillion rials ($36.7 million), marking a noticeable growth of 84.7%.

Insurers also paid 4.25 trillion rials ($111.4 million) to 147,824 life policyholders as indemnity.

The Iranian insurance industry’s payout ratio stood at 62% slightly higher than the same period of last year during the four-month period.

Based on the report, seven insurance firms had the highest payout ratios, with Mihan, Dana, Sina, Asmari, Iran, Alborz and Day insurance companies recording 191.4%, 112.6%, 85.6%, 81.6%, 71.6%, 68.7% and 66.9% of payout ratios.

Policymakers have been calling on insurers to shift their focus from PAP to other categories, due to the high payout ratio of the category at 55%. The payout ratio of health insurance category was 121.52% during the same period, according to Central Insurance of Iran’s data, the biggest number among all sectors.