صنعت بیمه در ایران- سه ماهه اول 2015

BMI Industry View

BMI View: Over the course of 2015, Iran's insurance sector should post steady, double digit growth. Much of this growth depends on increasing the volume of policy holders across basic lines. This should be driven by an expanding economy, which in turn will require both domestic reforms and an alleviation of western sanctions. We remain cautiously optimistic that the government will make some progress, albeit tentatively, in both of these areas; however, the market will continue to record sub-optimal growth.

Over the forecast period the market will operate below capacity; however, the Iranian insurance sector remains large and by regional standards quite developed. Given the relative size of the non-life segment relative to its life counterpart; it will remain the key source of growth for the sector as a whole. Within this segment, we identify compulsory motorists' third party insurance (CMPTL) and health insurance as by far the dominant lines. As such much of the driving force behind Iran's insurance market in 2015 and beyond will lie with these sub-sectors.

A lack of recent data from the regulator, Bimeh Markazi, poses a challenge in providing an accurate market analysis. However, the latest full year reports, from the Iranian full year 1390 (i.e. ending March 2012) and the half year ending August 2012 indicate that total premiums are growing strongly. This growth is being primarily driven by two lines, Compulsory Motorist Third Party Liability and Health insurance, which together will account for around 87% of the non-life segment in 2015, which in turn comprises around 90% of total premiums. The fact that growth is largely limited to two basic lines demonstrates that the market is in many ways underdeveloped. However, it suggests that there is some scope for growth in smaller subsectors over the long-term, albeit off a low base.

Over the recent past, inflation has severely hindered the life segment, which is in an embryonic stage of development, by discouraging Iranians from utilising life products as a conduit for savings. Looking ahead we believe that this segment has the ability to post high growth, admittedly coming off a very low base, if inflation levels can fall. Structural inflation is likely to remain an issue over the forecast period, with the government monetising its deficit rather than implement unpopular, sweeping subsidies cuts. However, the tentative deficit reduction measures by the new Iranian government, suggest that it should be reigned in to a degree over the forecast period.

We identify a number of strengths among Iran's insurers, which suggests that in the long-term there exists considerable upside potential. For example, Bimeh Iran, the largest state-owned company, has considerable scale. As one of the largest insures in the Middle East, it would rank as medium-large in most countries.

Possessing substantial capital, it would benefit from greater access to international markets. Moreover, the market as a whole has show resilience to international sanctions. However, heavy handed state involvement has given Bimeh Iran the substantial advantage of dominating the local reinsurance market, which in term pushes up reinsurance premiums due to a lack of competition. As such, companies are forgoing large portions of their gross premiums, which in turn suppress profitability. Greater access to international markets would help boost local insurers' profitability by providing greater competition to large state-owned entities.

Opening up the market to foreign reinsurers, through the alleviation of sanctions, would do much to boost the sector. The same is true of increased access to global capital markets as well as foreign investment in the sector, which would help to drive innovation. The prospect of this has slowed in recent months as Iran's tentative rapprochement with the West has stalled. However, other long-term domestic challenges will also continue to curtail growth, ensuring that the market operates below its capacity. An opaque regulatory system, heavy government intervention and a lack of public awareness of the benefits of many insurance solutions show little signs of improving over the forecast period. As such, we believe that growth will mainly be driven by an increase in the volume of policyholders. It is unlikely that the market breakdown for each sub-sector will change greatly. The same can be said for the market's competitive landscape, with Bimeh Iran likely to maintain its dominant position, in part because the government views it as a strategic asset.

Recent developments

■ Recent data from the regulator indicates that across the sector as a whole, CMPTL and health insurance are the main lines, accounting for over 60% of total premiums.

■ In mid-2014, the government announced plans to expand health coverage to five million lower-income Iranians.

■ In October 2014, Western media reported that the European Union may seek to re impose sanctions on Moallem Insurance Company (MIC), a major domestic maritime insurer, and other Iranian entities.

■ Recent data suggests that inflation is decreasing, albeit at a slower rate than the Iranian government forecast, and should reach 10% by mid 2017. This should prove a significant development, particularly for the life segment.

Key BMI Forecasts 2015

■ We think that total premiums will rise by 14.4% in USD terms to USD9.02bn.

■ Life insurance premiums should grow by 17.1% to USD0.88bn in 2015.

■ Non-life premiums should increase by 14.1% to USD8.14bn in 2015.

■ Within the non-life segment, motor vehicle-related premiums should grow by 14.7% to USD4.9bn in 2015.

■ Health insurance premiums should increase by 13.7% to USD1.93bn in 2015.

گزارش تحلیلی بیزینس مانیتور- صنعت بیمه در ایران- سه ماهه اول 2015