Iran’s first national state-controlled insurance company has reported a significant loss in net profit for 2022, down 300% on the previous year.
Founded in 1935, the company, which has offices around the world including the UK, has suffered significant losses in recent years under the management of political appointees.
The government-owned Iran Insurance Company had a market share of nearly 50% in 2014, which is now estimated at 27%.
The company’s accumulated losses since 2021 have increased by more than 4 trillion rials (nearly $95 million), in addition to its accumulated debts.
Aftabnews in Tehran has reported that the organisation’s downward spiral has accelerated much more rapidly in the past two years, which could point to the beginning of the presidency of Ebrahim Raisi, who appointed his political allies to run the company.
A number of promises were made to justify the changes as Ehsan Khandouzi, minister of economic affairs and finance, reshuffled key players in the company. The moves caused outrage in the industry and backfired.
In light of recent scandals such as the $3.5bn embezzlement case at Debsh Tea Company and the missing $336m of Tehran Municipality’s collected revenues, it is not inconceivable to attribute Iran Insurance’s losses to mismanagement and even possible corruption.
In January 2022, Raisi’s economy minister appointed Hassan Sharifi as CEO after removing Majid Bakhtiari from the position. Several Iranian media outlets described Sharifi as a ‘security agent’ with experience at the Iran Insurance Company.
Aftabnews reported in April that the appointment was made in an apparent “behind-the-scenes political deal”. Within months, the weaknesses of the new management team were fuelling infighting and disunity in the company.
A second change was the removal of Dariush Mohammadi and the election of Alireza Moghadesi to the board of directors of Iran Insurance in December 2022. Moghadasi was previously the head of the Islamic Republic of Iran Customs Administration (IRICA). It is not clear why Mohammadi was removed from this position.
Bimeyedigital, a website covering insurance news in Iran, described Moghadasi’s appointment as “controversial”, writing in December 2022: “Ehsan Khandozi has sent a clear message to the insurance industry with this appointment: There will be no room for meritocrats and elitists, but only a select few will be allowed to operate based on criteria set by the minister of economic affairs.
Another publication also criticised the move, writing Mohammadi should be regarded as the most qualified former member of Iran’s Insurance Council who has given his place to the least qualified person in the industry with no experience in insurance.
The most recent change took place in September and involved the director general of the Central Insurance Company of Iran (CIC). This is the regulatory body for Iran’s insurance industry.
The economy minister sacked Majid Behzadpour, the head of the Central Insurance Company of Iran, after nearly 20 insurance companies were targeted by hackers. The government denied the allegation, but it sparked further changes, and some have even suggested that the hacking was a pretext to legitimise management changes.
The ultra-conservative Paydari party, which has a majority in parliament, also has unparalleled influence in the presidential administration and controls most appointments to state-controlled companies. Numerous government corruption cases over the past two decades have shown that state-owned enterprises in Iran are a lucrative target for regime insiders.
