By defining the regulations, CII aims to help reduce insurers’ expenses and provide buyers with easy access to insurance services. The recent growth in insurers’ online sales and a handful of fraud cases are said to be a motivation behind the recent move.
CII President Abdolnasser Hemmati had announced earlier that the Central Insurance of Iran would not ban the sale of insurance policies through the Internet, but such operations must be supervised by CII, Risknews quoted him as saying.
The body has recently called on the public to ascertain the legality of brokers, by contacting CII or checking the directory of authorized brokers on its website, Financial Tribune reported.
Insurers’ Concerns
Earlier this week, the Iranian Insurers Syndicate held a meeting to review the proposed draft. The syndicate said that it has concerns over the social impacts of authorizing online sales, especially the effect it could have on traditional sales network of insurance companies, according to a press release on the IIS website.
Recent disputes between startups and brick-and-mortar businesses, like those between taxi drivers and ride-hailing startups, could be named as the main source of IIS concerns, as they clearly know that a wrong decision would be costly.
The IIS said it needs more time to assess the proposed regulations and make the final decision.
A total of 32,245 insurance agents are active in the country. Personal auto policies and medical insurance account for the biggest share of their portfolios.
Startups, an Opportunity
Hossein Tabar, founder of the insurance startup “Bidbarg”, believes that regulations should be focused on preventing fraud.
“I personally favor deregulation, but CII needs to develop a rulebook to organize online sales and advertisements,” he told Financial Tribune. “Many people wrongly assume that selling insurance policies through the Internet can be a lucrative business,” he said. “[But] The insurers’ sales network is very complicated.”
Bidbarg has put its focus on empowering insurance representatives and brokers. The website gets help from professional insurance experts to answer users’ questions about insurance services.
“In the first phase of our project, we managed to sign contracts with 400 representatives across the country,” Tabar said. “We even had customers in small villages.”
A majority of insurance companies are very slow in developing modern services. Developing user-friendly platforms for buyers is a startup’s advantage that helps them attract more buyers.
At the same time, development of insurance startups would help shift brokers’ focus from auto and medical policies to other categories like life insurance, which is a key goal of Iran top insurance body.