The first insurer of its kind in the country experienced substantial losses last year.
The first Iranian government-controlled insurance company saw considerable net profit losses next year, when it dropped by 300 percent when compared to its 2021 figures.
The insurer was first established in 1935 and has locations around the globe, including the United Kingdom.
The insurance company had already been seeing losses in previous years, but last year marked a new level of loss in its profits under the management of political appointees.
In 2014, the market share of the Iran Insurance Company was estimated to be around 50 percent. That figure has tanked to become only 27 percent in 2022, the year from which the most recent data exists. The losses the insurer has accumulated since 2021 have risen by almost $95 million (4 trillion rials) on top of debt that is also continuing to build.
The last two years have been especially hard on the government-backed insurance company in Iran.
According to a report in Aftabnews showed that the last couple of years have seen an acceleration in the losses the insurer has experienced. Some have speculated that the timing aligns with the time when Ebrahim Raisi became president and appointed his political allies to lead the insurer.
When Ehsan Khandouzi, Iranian Minister of Economic Affairs and Finance swapped some of the insurer’s top players, several core promises were made in order to justify the move. That said, the strategy backfired, leading to outrage in the industry.
Those who are pointing to these moves as the reason why the insurer has been experiencing profound losses are supporting their argument with facts such as the recent scandals including the missing $336 million in revenues collected by the Tehran Municipality and another $3.5 billion that was allegedly embezzled by the Debsh Tea Company. As a result, accusations of mismanagement and corruption within the insurer are not outside of the realm of possibility.
What the insurance company plans to do in order to turn the losses around has yet to be made clear. Only time will tell what they are and if they turn out to be successful.
