Quantitative and Qualitative Analysis of the Insurance Penetration Ratio of the Iranian Insurance Industry in 2012

Coordinator: Insurance Economics and Financial Research Group


Insurance penetration ratio is frequently considered as one of the most significant indices of the performance assessment of the insurance industry of a country. This ratio is also employed as one of the yardsticks to compare different insurance industries across the world countries.

In the present report, the insurance penetration ratio has been measured based on the official publication of Iran's macroeconomic statistics up to 2011 and 2012. Grounded on these data, in 2011 and 2012, the insurance penetration ratio in Iran was 1.378 and 1.849 respectively.

The analyses of these data indicate that aside from the characteristic growth of the industry, the penetration ratio in 2012 was rather more derived from the low growth in GDP, increase in compulsory premiums, and sanctions repercussions. In the portfolio of the insurance industry, there has been an immense imbalance observed. While the compulsory insurances (TPL) have the highest share of the insurance industry, other lines such as life insurances, oil, engineering, transportation, credit, and etc. have the least share.

Considering the oil-based economy, the non-oil penetration ratio (i.e. the non-oil ratio of the written premiums to non-oil GDP) was measured. In 2011 and 2012, these ratios were 2.31% and 2.65% respectively.

An estimation of the social and commercial insurance penetration ratios have been distinctively measured in order to assess the total insurance capacity of the country. Hence, the total penetration ratio for both types of insurances has been 9.18 in the year of analysis.

Furthermore, regional and provincial penetration ratios are also measured and presented in the present report. Based on these measurements, Tehran, Ardabil, and Yazd provinces have comparatively the highest ratios in the country with the penetration ratios of 1.98, 1.90, and 1.82 respectively. The lowest ratios were found in the three provinces of Kohgiluyeh and Boyer-Ahmad, Khuzestan, and Bushehr with 24%, 34%, and 43% penetration ratios respectively.

Keywords: Insurance Penetration Ratio, Quantitative and Qualitative Analysis, Regional and Provincial Penetration Ratios, Social and Commercial Insurance Penetration Ratios.

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