Iran Insurance Report Q1 2012
Includes 3 FREE quarterly updates
Iran’s insurance sector has a number of strengths, including scale in terms of gross written premiums per annum. Bimeh Iran, the largest company that is a state-owned enterprise, is one of the largest underwriters in the Middle East and would rate as a reasonably large insurer in most countries. Non-life penetration has consistently remained slightly above 1% of GDP. Among other things, this suggests the regulatory regime is reasonably sound. Iran’s insurers have managed to survive in the face of various challenges – not least of which is the almost complete lack of access to the global reinsurance markets. Unlike in other Middle Eastern countries, Iran’s insurance sector does not consist of a surprisingly large number of sub-scale non-life companies that are offshoots of local business interests that do not have a clear edge in the industry.
The sector is undergoing ‘privatisation’, via listings of companies on the Tehran Stock Exchange, and ‘liberalisation’, in that the decisions over products and pricing are moving from Bimeh Markazi Iran (the regulator and, to a certain extent, provider of reinsurance service) to the insurers themselves. However, in contrast to privatisation in other countries, the deals in Iran are not necessarily reducing government control and are certainly not increasing formerly state-owned companies’ access to capital. The limited data that is available suggests the main impact of ‘liberalisation’ is to transfer resources from shareholders of private sector companies (including the recently ‘privatised’ Bimeh Alborz, Bimeh Asia and Bimeh Dana) to the still state-controlled Bimeh Iran, employees and, to a certain extent, insurance customers.
As of December 2011, the data published by Bimeh Markazi indicates that total premiums rose by 27% in Iranian year 1389, which we have shown as 2010. This is a lot more than the 15% or so increase which had been indicated by other sources through Q311. The implication is that non-life penetration has risen decisively above the level at which had stagnated in 2005-10, specifically 1.1-1.2% of GDP. In the coming months, we will be looking for further details as to what are the key drivers of this growth. We would be amazed, though, if it is significantly because of developments in Iran’s miniscule life insurance sector. One of the defining characteristics of the economy is entrenched high inflation (and expectations) thanks to persistent monetisation of fiscal deficits. This produces an environment in which no prudent person would enter into a long-term savings contract. Unless and until economic policies in Iran change radically, the reality of the insurance sector will fall a long way short of its potential.
Iran’s insurance sector has a number of strengths, including scale in terms of gross written premiums per annum. Bimeh Iran, the largest company that is a state-owned enterprise, is one of the largest underwriters in the Middle East and would rate as a reasonably large insurer in most countries. Non-life penetration has consistently remained slightly above 1% of GDP. Among other things, this suggests the regulatory regime is reasonably sound. Iran’s insurers have managed to survive in the face of various challenges – not least of which is the almost complete lack of access to the global reinsurance markets. Unlike in other Middle Eastern countries, Iran’s insurance sector does not consist of a surprisingly large number of sub-scale non-life companies that are offshoots of local business interests that do not have a clear edge in the industry.
The sector is undergoing ‘privatisation’, via listings of companies on the Tehran Stock Exchange, and ‘liberalisation’, in that the decisions over products and pricing are moving from Bimeh Markazi Iran (the regulator and, to a certain extent, provider of reinsurance service) to the insurers themselves. However, in contrast to privatisation in other countries, the deals in Iran are not necessarily reducing government control and are certainly not increasing formerly state-owned companies’ access to capital. The limited data that is available suggests the main impact of ‘liberalisation’ is to transfer resources from shareholders of private sector companies (including the recently ‘privatised’ Bimeh Alborz, Bimeh Asia and Bimeh Dana) to the still state-controlled Bimeh Iran, employees and, to a certain extent, insurance customers.
As of December 2011, the data published by Bimeh Markazi indicates that total premiums rose by 27% in Iranian year 1389, which we have shown as 2010. This is a lot more than the 15% or so increase which had been indicated by other sources through Q311. The implication is that non-life penetration has risen decisively above the level at which had stagnated in 2005-10, specifically 1.1-1.2% of GDP. In the coming months, we will be looking for further details as to what are the key drivers of this growth. We would be amazed, though, if it is significantly because of developments in Iran’s miniscule life insurance sector. One of the defining characteristics of the economy is entrenched high inflation (and expectations) thanks to persistent monetisation of fiscal deficits. This produces an environment in which no prudent person would enter into a long-term savings contract. Unless and until economic policies in Iran change radically, the reality of the insurance sector will fall a long way short of its potential.
Contents
Executive SummaryTable: Iran’s Total Premiums 2008-2016
Key Insights And Key Risks
Key Insights And Key Risks
SWOT Analysis
Iran Insurance Industry SWOT
Iran Political SWOT
Iran Economic SWOT
Iran Business Environment SWOT
Life Sector
Middle East Life Sector Overview
Table: Middle East And Africa Life Premiums, 2008-2016 (US$mn)
Iran Life Sector Update
Life Insurance Industry Forecast Scenario
Table: Iran’s Total Life Premiums 2008-2016
Growth Drivers And Risk Management Projections
Population
Table: Insurance Key Drivers, Demographics 2008-2016
Non-Life Sector
Middle East Non-Life Sector Overview
Table: Middle East And Africa Non-Life Premiums, 2008-2016 (US$mn)
Iran Non-Life Sector
Table: Breakdown Of Gross Written Premiums, 2009-2010 (IRRmn)
Table: Breakdown Of Earned Premiums, 2009-2010 (IRRmn)
Table: Retention Ratios, 2009-2010 (net premiums as % of gross premiums)
Non-Life Insurance Industry Forecast Scenario
Table: Iran’s Total Non-Life Premiums, 2008-2016
Growth Drivers And Risk Management Projections
Macroeconomic Outlook
Table: Iran Economic Activity, 2011-2016
Political Stability Outlook
Table: Middle East And Africa Defence And Security Ratings
Healthcare Sector
Health Insurance
Epidemiology
Table: Iran’s Insurance Key Drivers, DALYs 2008-2016
Motor
Islamic Finance
Insurance Risk/Reward Ratings
Table: Middle East and Africa Insurance Risk/Reward Ratings
Competitive Landscape
Competitive Landscape Analysis
Major Players In Iran’s Insurance Sector
Table: Direct Premiums And Direct Loss, 2006-2010
Table: Total Premiums Growth, 2006-2010
Table: Number Of Insurance Companies And Employees, 2006-2007
Table: Number Of Branches, Agents And Brokers, 2006-2010
Company Profiles
Local Company Profiles
Bimeh Alborz
Bimeh Asia
Bimeh Dana
Bimeh Iran
Parsian Insurance
Regional Company Profiles
Allianz
Arab Insurance Group (ARIG)
Aviva
AXA
Chartis
Generali
HSBC Insurance
MAPFRE
MetLife ALICO
RSA
Zurich Financial Services
BMI Methodology
Insurance Risk/Reward Ratings
Table: Insurance Risk/Reward Indicators And Rationale
Table: Weighting Of Indicators Skip to top