"In the previous fiscal year, insurance premium grew by 22.5% and for the first four months of the current year (ended July 22), its growth rate was about 18%," Abdolnasser Hemmati was also quoted as saying by the official news website of CII.
"If this trend were to continue, the insurance penetration rate–the ratio of premium to GDP–will surpass the 2.2% achieved in the previous fiscal year," Hemmati added in the meeting that was also attended by Economy Minister Ali Tayyebnia.
According to CII chief, the portfolio of life insurance grew by 40% year-on-year and has also been rising in the first four months of the current year, heralding an increase in the overall share of the category among all insurance categories, Financial Tribune reported.
The official projected that the life insurance category will register a growth of 15% by the end of the current year, noting that if the uptrend continues, it will hit its growth target earmarked in the Sixth Five-Year Development Plan (2017-22) sooner than expected.
Hemmati referred to a gradual decrease in the loss ratio of insurance–the ratio of losses to premium–as a sign of the improving financial conditions of insurers, announcing that the ratio has declined to about 78% last year from 89% four years ago.
"Unfortunately, accidents caused many deaths and financial losses last year in the country," he said, adding that a 50% rise in premium for fire insurance is because of Iranians' greater awareness of these accidents.
The massive blaze at Plasco high-rise building in Tehran last year, which claimed the lives of many firemen and civilians, and rocked the capital was one of the main factors increasing public awareness about the necessity of having insurance.
In conclusion, Hemmati said the gradual strengthening of Iranian insurers, expansion of insurance and reinsurance ties with credible foreign companies, especially European ones, deepening financial oversight, division of life and non-life insurance categories and promotion of the culture of insurance as the most important ongoing and targeted operations of CII.
Bill on Eliminating VAT on Insurance
Tayyebnia referred to the many taxes levied on the insurance sector, calling for them to be reduced.
"Naturally, these taxes have increased the cost of premiums and their reduction will decrease premium costs and increase the outcome of insurance services," he said.
The official referred to measures undertaken for reducing taxes, namely an exemption of value added tax for the insurance industry.
"The government has approved and sent a bill in this regard to the parliament," he said, adding that if approved, the bill will serve as a positive step toward offering better insurance services to people.
Noting that the insurance industry bestows investors and manufacturers with safety and confidence, and is an agent for public welfare, the minister commended the industry for its gradual and steady rise away from controversy.
Tayyebnia stressed that the development of life insurance will be key to the development of insurance industry in the coming years, adding that it has also played an important role in the past few years.
"I hope CII can continue to strongly play its role as the supervising entity in insurance sector by focusing more on policymaking and leading the industry," he said.