The regulator (CII) compartmentalized the insurers into different categories depending on their Solvency Margin Ratio (SMR). The solvency of insurance companies - their capability to cover exposed risks – is stated in figures. Bigger SMRs indicate higher solvency.
Iran Insurance Company, which is the largest and the only state-owned firm in Iran, managed to elevate its SMR from 26 in 2017-18 to 72 in 2018-19.
From the total 28 firms listed by the CII, 22 had solvency Level 1, which means they are fully capable of meeting their financial commitments to policyholders, Financial Tribune reported.
Insurance companies with solvency Level 1 include Asia (SMR 145) , Dana (121) , Alborz (122), Parsian (120), Mellat (SMR 194), Saman (SMR 115) , Novin (SMR 137), Pasragad (SMR 157), Karafarin (SMR 117), Kowsar (SMR 126), Mihan (SMR 101), Ma (SMR 174), Taavon (SMR 138), Sarmad (SMR 138), Omid (SMR 106), Iran Moien (SMR 142), Asmary (SMR 138), Hekmat Saba (SMR 405), Tejart Nau (SMR 300), Middle East Life Insurance (SMR 2665) , Amin Re (SMR 1017).
The remaining six companies had Level 2 solvency, including Iran Insurance Company, Moalem, Razi, Sina, Dey and Arman. Level 2 means the company can meet its commitments but needs to address some real issues in its performance and are usually required to develop a 3-year plan for improving performance under CII supervision.
Taavon and Mihan insurance companies managed to improve their solvency level, from Level 2 in 2017-18 to Level 1 a year later.