Authors: Dr. Aziz Ahmadzadeh, Vahideh Nourani, Fatemeh Azadbakht, Amir Bahrami, Dr. Noban Fashandi, and Ehsan Barin
Coordinator: Insurance Law Research Group
There is a viable environment to expand business activities among Iran and Iraq. It is because of the large number of Iranians who are living in or traveling to Iraq, same cultural and religious patterns in both countries, and also political supports of Iran’s government to Iraq’s government. These all make a perfect background to increase business trades between the two countries. In such a way, the insurance industry is one of the upleft sectors to increase business trades. This research project focuses on the recognition of Iraqi insurance market as a demanding environment to receive insurance services from Iran.
First, based on the available documents and interviews with the experts, some general information about Iraq has been explained and also country risk of Iraq has been analyzed. Then, insurance industry’s structure in Iraq has been evaluated, which consists of laws, rules, and regulations, supervisory authority, and also major players in this industry. Then, Iraqi insurance market, history of Iranian Insurance Industry’s activities in Iraq, and also development prospect of Iranian insurers’ activities in Iraq have been investigated. Finally, Iraq Insurance Law and also some of the related circulars and laws translated to Persian and added to this research as appendices 2 to 10, to clarify insurance activity environment for the Iranian insures in Iraq. Because of some reasons like war and insecurities, high degree of existing risks in Iraq, and similar risks, most of the insurers haven’t initiated their activities in Iraq. But, based on the results of the current research, it can be concluded that Iraqi insurance market is intact and has high potential for supplying insurance services.
Iraqi insurance requirements’ at the time of political stability and sustainable security (like the situation we had seen in Kurdistan region before) are different from their insurance requirements’ at the time of insecurity, escalation of terrorism or civil war, and situations like today. So, the insurer who likes to have services in Iraq must have the ability to recognize and separate these insurance requirements’ and present his services in any situation, any time.
Generally, we can say that at the time of sustainable security, potential benefit and selling of insurance coverage related to economic activities (property and liability insurance) is higher, and at the time of insecurity, potential benefit and selling of personal insurance (life and health) and social insurance is higher.
It is important to know that according to Iraq’s oil revenue and its redistribution in various ways among the Iraqis’, in cases which insurers present good services related to insurance necessities, the people has the power to purchase insurance; also, different types of health insurance and some types of life insurance has been present in the form of group insurance by contracting among principles and insured agents of public sector, based on Iraqi administrative structures. Of course, this needs to set-up some structures and administrative arrangements by insurers, and Iranian insures’ cooperation in this way could be successful. Overall, prior to the performed research project, there are some recommendations listed below which makes the role of Iranian insurance industry more powerful and more effective to sell and present insurance services in Iraqi insurance market:
- It is recommended that Iran’s insurance industry design a model of cooperation in the form a comprehensive strategic plan for short-mid-long term in the form of cooperation, consortium or behavioral coordination, to sell and present insurance services in Iraq. Every insurer, in the form of group cooperation, can do a specific part of such plan (which is an export development program of insurance services) to make the plan achieve its goals.
- A strategic plan shall have the listed features below:
- Flexibility of the plan, prior to various situations of security in Iraq at various times.
- The plan shall consider different scenarios of the activity of the Iranian insurers; from setting-up a branch or a direct agency, to establishment of coverage companies, etc. Also, it shall consider the potential of native features of Iraq to increase Iran’s influence in this country, especially in the fields like compensating payment for losses and evaluating losses, granting sales agencies, or presenting compensating services.
- Prior to the risk management mechanism of the insurance companies and the need of reinsurance transfer of accepted risks portfolios by direct insurance companies, it is necessary that the Central Insurance of Iran (Insurance Regulatory and Supervisory Authority), both as a supervisory authority and as the main reinsurance organization in Iran, take necessary measures to make sure that the accepted risks in the Iraqi insurance market in the context of insurance principles have the ability to accept for reinsurance services.
- Based on the fact that Kurdistan region has more security than the Central Iraq, it is recommended to the Iranian insurers, who want to enter the Iraqi insurance market, initiate their activities in this region, which has less risks and more standards compared to the other areas in Iraq. After that, whenever Iranian insurers get more familiar with the political, cultural, economic, and social situation in Iraq, then they can spread and expand their works in the other parts of Iraq, by establishing new branches and agencies in various cities, and so, they can increase their share of the market and stabilize their presence in this market.
- Iraqi insurance law and some of the related regulations alongside with the Investment Law in the Iraqi Kurdistan Region have been translated to Farsi and appended to the research. They provide a good starting point for the Iranian insurers in order to develop an sort of insurance activity in Iraqi insurance market.
Keywords: Iraqi Insurance Market, Kurdistan Region, Insurance Marketing, Market Research