گزارش تحلیلی بیزینس مانیتور-صنعت بیمه درایران-سه ماهه اول2011

 

Iran is home to an insurance sector that writes over US$5,000mn in premiums annually – equal to around1.2% of GDP – and several of the largest non-life companies in the Middle East, indicating that there is
widespread understanding of the general concept of insurance among its citizens and companies. However, the challenges that must be overcome if Iran’s insurance sector is to reach its full potential are large and numerous, and would be so even if Iran were not subject to international sanctions. In one of the few developments reported in the trade media outside Iran, both Allianz SE and Munich Reinsurance suspended their businesses in Iran. This decision will have very little impact on Allianz, but may cost Munich Re around EUR10mn in annual reinsurance premiums.

Arguably the main problem is the conduct of monetary and fiscal policy. In spite of substantial revenues from oil production, the government has for a long time run substantial fiscal deficits, which have been monetised. As we explain in this report, the structural deficits are mainly the result of subsidies (for instance in relation to the price of gasoline). The consequence is that, for much of the last decade, Iran has experienced inflation of 12-15% a year, although the rate rose to 27% in 2008/09.

High inflation distorts the impact of prices and complicates competition by companies (and insurers) on the basis of price. Furthermore, it shortens the perspective of economic actors. For Iran, one consequence has been the non-development of life insurance, which by its nature involves long-term relationships between underwriters and their clients. The history of persistent high inflation sets Iran apart from all other countries in the Middle East whose insurance sectors are profiled by BMI.

As we have discussed in previous reports, Iran is moving gradually towards the liberalisation of financial services. About 75% of the market (in terms of gross written premiums) is accounted for by the four large, state-owned insurers – Bimeh Iran, Bimeh Asia, Bimeh Alborz and Bimeh Dana. The remainder includes 16 relatively new private sector companies, including Bimeh Moallem, Bimeh Parsian, Bimeh Karafarin and Bimeh Razi. In 2010, Bimeh Asia and Bimeh Alborz were privatised and are now listed companies. Bimeh Dana is due to be privatised. By the end of 2011, private sector companies should account for about 40% of gross written premiums. As yet, there are no plans for the privatisation of Bimeh Iran.

In this report we continue to provide a breakdown of the insurance sector by line from the point of view of the regulator or trade association. In Iran in 2008/09, comprehensive motor insurance (presumably compulsory motor third party liability, CMTPL) was the largest line in the non-life segment, accounting for about half of gross written premiums. Other major lines included motor (CASCO), health, fire and liability insurance.

We have been able to ensure that the report includes actual data for the year to March 2010 (this coincides
with the Iranian year 1388). For purposes of comparison with data from other countries, we have generally described the period as ‘2009’. For the year to March 2011 (‘2010’), we estimate total premiums of IRR56,565,717mn. This includes non-life premiums of IRR53,950,256mn and life premiums of IRR2,615,461mn. In terms of the growth drivers that underpin our forecasts, we forecast non-life penetration to rise from 1.28% of GDP in the year to March 2011 to 1.45% by 2015. We expect that life density will remain minimal, increasing from less than US$4 per capital to US$7 over the same period. BMI’s proprietary Insurance Business Environment Rating for Iran is 34.1.

Liberalisation

For most of the last five years, Iran’s non-life insurance sector has been growing in real terms. Year after year, the increase in premiums was slightly greater than the overall level of inflation, which was typically around 20-25% per annum. The latest annual report from Parsian Insurance, for the year ending March 2010, makes it clear that the market has stopped growing in real terms. The proximate cause of this is liberalisation, which has permitted market protagonists to lower their prices on a number of non-life lines. However, the problem has been exacerbated by particular insurance companies that have lowered prices to levels that are uneconomical.

Political Risk

BMI does not expect that the political unrest in Iran will lead to a significant contraction in GDP (in the way that it did 30 years ago at the time of the fall of the shah). Nevertheless, we recognise that political problems could have a negative impact on economic activity.

Government Subsidies

Any substantial reduction in government subsidies (on gasoline, etc) will be necessary, although not sufficient, to move towards balanced budgets and lower inflation. Iran’s insurance sector will remain stunted while inflation remains a problem.

International Activities

The isolation of Iranian insurance companies from the global economy is not total. Bimeh Iran has minor operations in Gulf Cooperation Council (GCC) countries and it may be able to expand these over the medium term.