Pars Reinsurance Company, affiliated with Parsian Financial Group, is the fourth reinsurance company in the country of 83 million people, raising hopes for improving competitiveness in the reinsurance sector.
Only two reinsurance companies operate in the Iranian market, namely Amin Re and Iranian Re. A limited number of insurance firms have permits from the regulator to enter the reinsurance industry. Experts say loopholes and poor regulations are depriving the reinsurance industry from playing its expected role.
Reimposition of US sanctions along with growing demand for reinsurance has prompted investors and insurers to broaden their horizon.
Saman Reinsurance Company got a license and is to make a debut soon. It will be Iran's third and the second affiliated to Saman Bank.
Iranian insurance companies cover nearly $500 billion worth of risks. This is while most risks are covered by local firms, including reinsurance companies, insurance companies and the CII.
Specialized Firm
According to Risknews, the council also granted a permit to Charisma Life Insurance Company -- the third life insurance company. No further information about this life insurance company was available.
Two specialized life insurance companies are operating in the market, the Middle East Life Insurance Company and Baran Life Insurance Company while 33 insurance companies are active including offshore firms and reinsurance companies.
The Central Insurance company of Iran has welcomed establishment of new firms. "Investors are interested in starting insurance companies. Newcomers will help boost competitiveness" in the gradually growing industry, Gholamreza Soleimani, the CII boss said.
However, promoting specialized insurance companies is one of the measures crafted by the CII to shift insurers' focus from the auto and medical segment to more profitable and innovative spheres, especially life insurance that has not been popular.
According to a directive issued by the government and the CII-affiliated council, the minimum required capital for establishing an insurance firm is one trillion rials ($22.7 million).