Iran Insurance Company, fully owned by the government, has insured Iran Air’s new Airbus jet that arrived in Tehran on Thursday.
Mohsen Pourkiani, IIC’s chief executive, said his firm has provided full coverage for Iran Air’s new Airbus A321, including passenger liability insurance, public liability insurance and airplane body insurance.
The official was quoted as saying by the Ministry of Roads and Urban Development’s website that IIC would insure all the airplanes that will be added to the fleet of the state carrier Iran Air.
IIC’s website claims that the coverage extends to all international airports. However, Iran Air officials have announced that the plane delivered on Thursday will be currently used only for domestic flights.
“The company was involved in the process of purchasing new airplanes,” said Pourkiani, adding that it provided advice regarding insurance-related issues and requirements necessary for purchasing the planes.
The insurer did not provided more details about the terms of the contract.
At present, 19 Iranian airlines own an aggregate of 273 aircraft with an average age of 23.74 years, including 266 passenger and seven cargo planes.
Of these, only 163 are operational, according to the Ministry of Roads and Urban Development. The average age of the airlines’ operational feel stands at 22.9 years.
Iran Air has signed deals with Boeing, Airbus and ATR to purchase 200 new aircraft, which would add 50,000 seats to its fleet. The jets are set to be delivered in the next 10 years.
Talks are also underway for purchasing new aircraft for other airlines.
This could be a great opportunity for Iranian insurance firms, especially for IIC, which is reportedly dealing with numerous problems.
Iranian insurers generated a sum of 1.6 trillion rials ($40 million at the market exchange rate) by selling 946 insurance policies in airplane category. They paid indemnities worth 210.4 billion rials ($5 million) to 202 claimants during the last Iranian year (ended March 19, 2016).
The payout ratio of the category stood at 12.8%, marking a 17.3% drop compared with the previous year.
Iran Insurance Company accounted for 47% of generated premiums and 71% of paid indemnities during last year.
The Central Insurance of Iran’s statistics indicate that IIC’s market share has increased to 53% during the first eight months of the current Iranian year (ended Nov. 20).
Currently, the airplane category accounts for 0.58% of IIC’s portfolio.
As per the law, passengers and third-party insurance coverage are mandatory for airliners, whereas they are free to purchase other types of coverage.
The Fifth Five-Year National Economic Development Plan (2011-15) stipulated that Iran should become the first regional hub in cargo transportation and the second in passenger transport.
IIC is the only Iranian company with 12 overseas branches, including branches in the UAE, the UK and Oman. The firm now has the opportunity to come up with a long-term plan and expand its operation in airplane category, as a sustainable and potentially profitable source of income.