Fitch, the global ratings agency has predicted that Iran's insurance
sector will record an average of 15% growth a year in the next five
years, as the partial easing of sanctions against the market in early
2016 helped it grow.According to a Fitch report on the fourth quarter of
2018, high inflation and low household incomes have constrained the
development of the life insurance segment, while the lack of access of
insurers to foreign capital and expertise were an impediment to
substantial growth of the non-life segment. Nonetheless, the sector is
expected to grow rapidly in the coming years.
The agency, however, has
not discussed the possible ramifications of the US pullout from the
nuclear deal in May on the insurance sector of Iran. As reported by
Fitch, Iran's life and non-life insurance sectors are dominated by
domestic players and the market size as a whole is small, with sanctions
leading to an absence of international companies and their subsidiaries
needed to grow the industry. "Overall, we expect motor vehicle
insurance to remain the largest sub-sector, and that it will be boosted
by higher volumes owing to an expansion in the national car fleet." The
scale of the sub-sector is also increased by its largely compulsory
nature. Demographic trends will boost morbidity and healthcare spending,
which will in turn boost health insurance. The other sub-sectors have
been - and will remain - hampered by low income levels of many
households; high inflation eroding the value of savings; and a lack of
understanding of the benefits of life insurance.The largest player by
far in Iran's insurance sector is Bimeh Iran (Iran Insurance company), a
fully state-owned composite insurer established in 1935 and holding
over half of total insurance industry share. Wide-Ranging Services It
offers a wide range of personal and corporate non-life lines, including
insurance for: cars, fire, contractors, property, marine, aviation,
personal accident, shipping, liability and engineering risks. It also
offers long-term savings for personal customers as well as travel
insurance, and it provides reinsurance to other insurers. Outside of
Iran, Bimeh Iran has 12 branches in the Persian Gulf Cooperation
Council, including in Saudi Arabia, the UAE, Bahrain and Oman. The
largest player by far in Iran's insurance sector is Bimeh Iran (Iran
Insurance Company), a fully state-owned composite insurer established in
1935 and holding over half of total insurance industry share It holds
around 45% of the domestic market share and 50% of the market share in
several subsectors. It is one of the few domestic firms with a large
overseas presence, and will likely work to grow this strategy as
competition intensifies in the domestic market.
Bimeh Iran benefits from
significant support both in terms of capital and access to public
contracts, which means the company is well placed to take advantage of
growth potential in the Iranian market moving forward.There are three
partially privatized firms in Iran: Bimeh Alborz, Bimeh Asia and Bimeh
Dana. Bimeh Alborz, established in 1959, offers a range of personal and
corporate non-life lines, including insurance for cars, fire, personal
accidents, shipping, liability and engineering risks. It also offers
long-term savings products for personal customers, as well as travel
insurance and group health productsLike the banking sector, Iran's
insurance industry is regulated by the state. Bimeh Markazi (also
referred to as the Central Insurance of Iran). Central Insurance of Iran
was established in 1971 by the government, through the Act on
Establishment of Bimeh Markazi Iran & Insurance Operation. It
governs all operations in the local insurance sector, including those
located in Free Trade - Industrial Zones. Foreign companies are allowed
to buy up to 49% of the total shares of an Iranian insurance company,
though concerns remain over the quality of the market's financial
reporting, the high risk to participation and the heavy involvement of
the state in the sector. Bimeh Markazi grants the government oversight
of the Iranian insurance industry and is responsible for regulating,
guiding and expanding insurance operations in Iran; giving guidance to
insurance companies; and protecting the insured and their
beneficiaries.
IRAN INSURANCE NEWS.... (ICE Teheran)