Unsurprisingly, insurance companies paid hefty sums in claims in the medical insurance category during the two months to May 21.
Payouts in this bracket amounted to 14.7 trillion rials ($75 million), topping all other insurance types as it accounted for more than 35% of the total payouts.
The mandatory personal motor insurance, known as third-party auto insurance, had topped the payout list for years.
Meanwhile, insurers generated 11.6 trillion rials ($60 million) from selling medical insurance policies during the period. This was 42.15% higher compared to the same period last year, though medical category's share from the industry's total premium income declined to 13%.
Medical insurance category's payout ratio was 126% during the two months.
The Insurance Research Institute had predicted higher risks in medical and life insurance categories, as the vicious disease has led to a huge increase in medical costs.
Concerns over health expenses was expected to result in increase in the insurers’ premium income. But the rise in claims outpacing premium income.
Life Insurance Picks Up
Life insurance, however, posted a sharp increase in premiums reaching 15.4 trillion rials, up 37%. Life insurance accounted for 18% of insurers' total premium income -- the highest ever since records were kept.
However, there is much doubt over the sustainability of life insurance premiums. Families are apparently less likely to be able to afford costly life insurance on a regular basis, which could add to the insurers’ pains in the not distant future.
Aviation insurance registered the highest decline in premium income during the said period at 22%.
Insurance companies collectively generated 86 trillion rials ($357 million) in premiums in the first two months (March 20-May 21) of the current fiscal year – up 31.4% compared to the same period last year. CII data showed a year-on-year jump of 12.2% in payouts, as insurance companies paid 42 trillion rials in claims.
Personal vehicle insurance accounted for 39% of the total premium, even though the category experienced significantly lower payouts during the extended lockdown that has hammered small and big business alike and pushed many into insolvency.
Iranian Insurers' Syndicate recently published a report assessing the extent of the virus influence on the nascent sector. It forecast 13% increase in insurance companies' premium during the current fiscal year that ends in March 2020.
This is while, insurers posted 32% growth in their premium income in the previous fiscal year.
Experts emphasize the need for developing intelligent platforms, employing innovation and use of big data by insurers to minimize short-term effects of the pandemic and reduce losses in similar situations in future.