Iran Insurance Report Q2 2016
BMI View: While still at an early stage, Iran's growing rapprochement with the international community islikely to lead to increasing opportunities for overseas insurers and investors over the comingyears. Although the Iranian insurance market is relatively developed by regional standards, there is stillsignificant potential for growth, especially in the life segment and most non-compulsory non-life lines. Thelifting of trade sanctions should spur the growth of the economy which will lead to significant growth inincome levels. Foreign firms will be looking to target these high-income households while also for lookingfor opportunities in other areas of the economy, not least the country's sizeable energy sector.
Key Updates And Forecasts
Ongoing currency market fluctuations and uncertainty surrounding the lifting of Iranian trade sanctionshave led to a marginal downgrade of our short-term insurance growth forecasts this quarter. We expectlife insurance premiums to grow by 2.1% y-o-y during 2016 in USD terms, while non-life premiums willcontract by 0.4%. Both markets will expand at double-digit rates in local currency terms.
Iran's gradual reintegration into the international community is nevertheless leading the country's insurersto increasingly expand their reach overseas. In December 2015, Iran Insurance was reportedly innegotiation with Iraqi state insurance companies al Araqiyya and al Badiyyah with a view tostrengthening cooperation between the companies. In the same month, Iran's government participated in aJoint Commission Meeting (JCM) in India, which will see India and Iran pursue trade and investmentagreements across a number of industries, including insurance and banking.
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