صنعت بیمه در ایران- سه ماهه دوم 2015
BMI Industry View
BMI View: We have revised down our expectations for Iran's insurance sector over the course of 2015 and the forecast period. The is largely due to a weaker than expected economy, with continued international sanctions suppressing growth. Nonetheless, the sector should achieve strong single-digit growth in 2015.
The Iranian insurance market is by regional standards developed. Taking into account 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. Compulsory motorists' third party insurance (CMPTL) and health insurance remain by far the dominant lines. These will constitute the greatest driving forces behind the increase in premiums over 2015.The regulator, and leading insurers, continues to provide only limited data. However, recent
information suggests that total premiums are growing strongly. Growth is largely due to the two basic lines of motor ad health, which together make up nearly 90% of non-life premiums. This demonstrates that the market is in many ways underdeveloped.
High inflation is likely to pose the greatest barrier to expansion in the life segment over 2015, by discouraging Iranians from utilising life products as a conduit for savings. 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. In addition, sustained western sanctions will continue to hurt the country's macroeconomic performance.
Despite downgrading our expectations for the market over 2015 and beyond, in the long-run there exists considerable upside potential in Iran's insurance sector. Bimeh Iran, the large state-owned company, possesses significant scale. As one of the largest insures in the Middle East, it would rank as medium-large in most countries. It would benefit from greater access to international markets. However, heavy handed state involvement has given Bimeh Iran the substantial advantage of dominating the local reinsurance market, which in turn pushes up reinsurance premiums due to a lack of competition.
Long-term challenges aside from international sanctions 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 for basic compulsory lines. 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.
A lack of market consolidation or any
meaningful change to the sector's competitive structure will hinder the sector's development. It will
prevent many insurers acquiring scale, which would allow them to boost their profitability by absorbing some
risk rather than seeking recourse ton outwards reinsurance. As such, the market will continue to be
characterised by its fragmented nature, made up of many sub-scale players.
These only operate across basic lines and compete almost exclusively in terms of price. This in turn discourages product innovation or investment in non-compulsory lines.
Recent developments
■ Recent analysis shows that the economy is performing weaker than expected, with inflation set to remain stubbornly high.
■ 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.
Key BMI Forecasts for 2015
■ We think that total premiums will rise by 14.4% 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 دوم 2015
