As per data released by the Central Insurance of Iran, the share of life insurance from total premium income was 14.5% -- an all-time high.
But growth in premium income in this category seems to be linked more to higher prices of policies. The above-mentioned sum was generated from 2.12 million life insurance policies, which surprisingly is 11.5% lower than the total life insurance policies issued the year before.
Insurers also paid 23.9 trillion rials ($211 million) in life insurance claims last year -- 56.3% higher than what was paid the previous year. The total number of claims in the category was 519,000 in the 12-month period, down 30% year-on-year, Financial Tribune reported.
The payout ratio of the category was 53.1%, according to CII records.
A review of the performance of 30 companies active in the industry shows that private insurers are apparently expanding their footprint in the life insurance category that was largely said to be lethargic in the recent past.
Iran Insurance Company, the sole state-owned company, accounted for 19% of total premiums last year. The giant insurer, however, managed to double its income from life insurance; 12.8 trillion rials compared to 6.1 trillion rials the year before.
This is while, the total number of life insurance policies sold by the CII declined by a massive 45.9% last year.
Private insurers sold 1.7 million life insurance policies, which was barely 1% higher than the year before, though they registered a 32.2% growth in premium income.
The category accounted for 17.9% of private insurance firms income.
Pasargad at the Top
Pasargad Insurance Company affiliated to Bank Pasargad Iran, had the lion’s share of the life insurance market last year, as it alone accounted for 21% of the total premium. Pasargad seems determined to get the biggest slice from this category as its annual portfolio shows 60% share of the life insurance market – the top the of the list.
Karafarin Insurance, with 9.3% share was second. The bank-affiliated insurer earned 55% of its annual income from the life insurance category. Asia, Saman and Moallem insurance companies were placed from third to fifth place.
There were more than 28,000 agents across the country dealing only in the life insurance segment. A year-on-year comparison shows that more than 7,000 life insurance agents were added to the list last year.
According to a report by Fitch, a prominent global credit rating agency, in the fourth quarter of 2018, high inflation and low household income constrained the development of the life insurance segment, while the lack of access of insurers to foreign capital and expertise were other impediments to substantial growth in the non-life segment.
The sector, however, is expected to grow rapidly in the coming years.
Fitch said Iran's life and non-life insurance sectors are dominated by domestic players and the market in its entirety remains small, with sanctions leading to the absence of international companies and their subsidiaries needed to grow the industry.