BMI View: This quarter, we maintain a fairly dismal view of the prospects for Iran's insurance sector. The partial easing of economic sanctions against Iran in early 2016 does not appear to have had a significant impact on Iran's insurance sector. The various challenges that have constrained the development of the life segment (high inflation and low household incomes) and the non-life segment (lack of access by insurers to capital, reinsurance and know-how from outside the country) remain in place. Penetration (premiums as a percentage of GDP) will likely remain at a low level in both major segments.
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Iran's insurance sector will likely grow at high single digit rates in USD terms for much of the forecast period. This is largely because of fundamental factors driving growth in the motor vehicle and health insurance sub-sectors of the non-life segment. Motor vehicle insurance volumes will increase thanks to an expansion in the car fleet. Demographic factors are boosting healthcare spending and, therefore, demand for health insurance.