Iran Insurance Company (IIC), the biggest state-owned insurer that will soon become the only government-run insurer after the state’s shares of other companies are sold, is to establish a specialised life insurance operation.
“In line with the emphasis of the Central Insurance of Iran (CII) and the High Council of Insurance, IIC is to completely separate its life insurance portfolio and will establish this new complex [with independent and unique functions in technical, financial, investment, IT and other areas] with sound investments,” said Mr Mohammad Zahednia, the head of IIC’s Department of Technical Affairs.
There are plans too to expand the distribution network. A total of 780 life insurance agencies sell various IIC policies, “and it has been decreed that the number of life insurance agencies would be increased to three times the current capacity”, reported Financial Tribune, citing a company statement posted on the insurer’s website.
Industry regulator CII is promoting life insurance in the country. It has stopped issuing general insurance licences and encourages insurers to spin off their life business as separate units. Life insurance currently accounts for 12% of the overall market share.
The first standalone life insurer in Iran, Middle East Life Insurance Company, affiliated with the privately owned Middle East Bank, started operations in February 2017.
14 million Iranians have life insurance
About 14.2 million Iranians currently have life insurance policies, with 2.5 million of them obtaining the cover last year alone, according to Dr Abdolnasser Hemmati, President of CII.
Iran currently has a population of over 80 million, which means about 18% of them have life insurance, reported Financial Tribune.
The past four years witnessed the most rapid growth in this class of business, with its contribution to the overall Iranian insurance market now reaching 13.4% compared to 7.8% five years ago, said Dr Hemmati at a recent conference on life insurance.
Commenting on this growth, he referred to supply changes in the insurance industry, coupled with higher demand, adding that the qualitative and quantitative structures of selling life insurance have improved.
While only 16% of insurance agents were active in life insurance six years ago, that percentage has now risen to about 25%. M