Iran Insurance Industry Overview
Iran’s insurance market ranked 42nd in the world in terms of the value of total premiums with IRR 206.5 trillion in 1393 (2014/15) which grew by %31.7 compared to last year. The private sector generated % 59.4 of the total.
With $84 written premiums per capita, insurance industry constituted around 2% of Iran’s GDP in 2013. Iran’s non-life segment accounted for over 89% of total premiums written. Generally, this segment has reached sustained growth for the last several years. Basic motor and health lines forecast to enjoy steady year-on-year growth in non-life segment.
Compulsory motorists’ third party with 42% and health with 20% of written premiums are largest lines of non-life insurance where life insurance constitute %11 of the total insurance premiums in 1393 (2014/15). The growth of life insurance penetration rate from %0.08 to %0.15 from 2009 to 2013 indicates the potential of investing in this market whereas the life insurance premiums forecast to grow by 0.2% in 2015. However, life insurance is in an embryonic stage of lifecycle and the lack of awareness of the life insurance benefits deters life insurers developing market share of total premiums. It brings a growth potential that this market will become appealing to new entrants and foreign investors.
There were 27 insurance companies active in the market as of March 2015; one fully state owned company, 18 private sector insurers, 7 free-zone insurers and 2 private sector reinsurance companies (one of them is in free zone insurers). 18,252 people worked in Iranian insurance industry in 2013 where 68% of them are male and 32% are female.
Historically, sanction related issues leading to high inflation and prevented the development of Iran’s insurance sector. Sanctions as the barrier of accessing global reinsurance markets resulted retention ratios and insurers’ profitability levels. Iran nuclear deal framework provides the stimulus for a high growth rate when financial sanctions are lifted. This macroeconomic stability will ensue more consistent growth rates in Iran’s life and non-life segment.