Oct. 31, 2016


Dr. Younes Mazlumi

Iran

Dr. Younes Mazlumi

CEO, Razi Insurance

TBY talks to Dr. Younes Mazlumi, CEO of Razi Insurance, on the prospect of separating life and non-life and methods to increase market share in such a competitive market.

BIO

With more than 21 years’ experience in the insurance industry, Dr. Younes Mazlumi is the CEO of Razi Insurance. He is well known for bringing a new perspective into the insurance industry in Iran while holding many positions in different insurance companies, such as CEO, Deputy CEO, and Technical Deputy, among others. Dr. Mazlumi is a Member of the Board of the Iran Industrial Managers Association and the Association of Insurance Agents. He holds a PhD in Business Administration from Bordeaux University of France, and teaches Risk Management & Insurance at several leading Iranian universities.

What is the competitive position of Razi Insurance among private insurers in Iran?

Since 2002, we have issued around 12 million insurance policies and currently hold a 4% market share, insuring 2.5 million people. Since our establishment, some 25 other private insurers have been set up as well; however, in most of these cases their shareholders are institutions related to the government. Currently, there are only two or three insurance companies in Iran that are 100% private, and Razi Insurance is one of them. Another difference is that our income does not come from the shareholders; 99.5% of our business comes from our customers. We are a general insurance company active in health, life, liability, engineering, projects, construction, and automobile insurance, where most of our policies are focused; however, we also insure numerous oil and gas projects, such as the Azadegan oil field, the largest oil field in Iran.

The Central Insurance of Iran is adapting some policies to modernize the insurance market, including separating life and non-life business. How is Razi Insurance planning to adapt to these changes?

The law on third party liability (TPL) automobile insurance was passed 50 years ago, and is still the most important segment of the insurance industry accounting for 50% of the total premiums in Iran. Life insurance has not had that big of a share of the insurance business, but it is a growing business with a 7% share of all premiums written. Its growth will depend on how insurance companies can introduce new products. Another important factor would be if European insurers decide to enter the market, making the market grow up to 9%, but not to the level of countries like Japan. If the regulator decides to separate life and non-life business, we are ready to divide our company into two to meet this requirement.

Is it part of your strategy to expand across the region?

We are preparing a business plan for developing our regional expansion. We are looking at neighboring countries, such as Afghanistan and Iraq, as well as countries in the north, particularly the CIS countries. We want to establish branches in the region and are already talking to some of these countries, although their rules are different; in some of them we will be able to open a branch but in others you have to set up a new insurance company.

How do you see the future development of the insurance market in Iran?

Iran is an excellent market from an insurance point of view. There are many differences between Iran and other Middle Eastern countries; for example, in many Islamic countries conventional insurance is forbidden and only takaful insurance services can be issued. However, in Iran and Turkey, conventional insurance is not forbidden, and this is why we are the second-largest insurance industry in the MENA region. Moreover, Iran has a population of 80 million, being the second-largest country in the MENA region in terms of population and extension. Furthermore, Iran has the second-largest gas reserves in the world and the third-largest oil reserves. In this regard, the insurance industry plays an important role in the oil and gas sector, and this is why we will play an even larger role going forward than in previous years.

What are your objectives for the year ahead?

One of our objectives is to grow our market share by 0.5% annually. Our goal for 2016 was to have a 3.5% market share, but we have achieved 4% already. Due to the increase in the number of private insurers in Iran and the decrease in the presence of the in the sector, by 2022, the insurance company with 7% of market share will be the largest insurance company in Iran. Our goal is to be the first insurance company in the country in terms of market share and number of premiums.

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