In the Name of Allah, the Magnificent, the Merciful

Transcription

1 In the Name of Allah, the Magnificent, the Merciful

2 Profile Bimeh Markazi Iran (Central Insurance of I.R. Iran) Date of Establishment: June 1971 President: Mohammad Ebrahim Amin Address: No. 2, Insurance Tower, Africa Ave , Tehran, Iran P. O. Box: Protocol Dept.: Tel/Fax: pro@centinsur.ir CONTENTS Profile 2 Overview 4 Minister s Note 6 President s Message 8 High Council of Insurance 10 Organization Chart 12 Management Board 13 Insurance Activities in Iranian FTZs 14 Regulations on Establishment of Foreign Institutions 15 Our Directors General 16 Green Card System 18 ECO White Card Scheme 19 Insurance Research Center 20 Bodily Injury Indemnity Fund 21 Iranian Insurance Companies 22 Iranian Insurance Market 23 Financial Statements 32 Balance Sheet 32 Income Statement 34 Notes to Financial Statements 35 Financial Highlights 37 Our Membership 38

3 Overview Bimeh Markazi Iran (Central Insurance of I.R. Iran) was established in 1971 (1350) by the Act of Iranian Parliament for the purpose of regulating, expanding, guiding insurance operations in Iran, for the guiance of the insurance companies, along with the protection of the Insured and their beneficiaries, as well as to ensure government supervision of such operations. Parallel with regulatory and supervisory missions, Bimeh Markazi Iran has been entrusted to accomplish local compulsory reinsurance and to conduct inward and outward reinsurance business in both national and international markets, consistent with its Establishment Act. It will continue to operate the following duties; To prepare by-laws and regulations, to issue directives deemed necessary for the promotion and proper execution of insurance operation in Iran, with due regard to the text of this law To compile necessary information on the performance of all insurance organizations operating in Iran To effect compulsory reinsurance operation To effect facultative reinsurance from Iranian and foreign insurance organizations To cede reinsurance to Iranian and foreign related companies whenever deemed necessary To administer the Bodily Injury Indemnity Fund (BIIF), to prepare by-laws relating to the Fund, specified in Article 10 of law on Compulsory Third Party Liability by Owners of Land Motor Vehicles under the Civil Law, approved in January 1968 (Day 1347) To guide, lead, and supervise insurance companies, to afford protection to such companies in view of ensuring sound insurance market, to regulate matters relating to agencies and brokers, to supervise reinsurance matters to prevent unfair, deceitful and unsound competition, to regulate and supervise insurance industry. Under the Iranian compulsory reinsurance regulations, all insurance companies operating in Iran are obliged to cede certain percentage of their direct life and non-life business to Bimeh Markazi. Also, if and when, insurance companies intend to acquire reinsurance coverage from abroad they must offer certain percentage of each reinsurance contract to Bimeh Markazi Iran under the same terms and conditions. Bimeh Markazi Iran endeavors to use local reinsurance capacity by retroceding all or part of compulsory reinsurance to local insurance companies according to their capacity, after which contribution from international markets is welcome. To summarize, Bimeh Markazi Iran plays a key role in insurance industry by promoting, regulating, and supervising insurance activities within the market while providing national and international reinsurance services. Currently, there are 28 Iranian private insurance and reinsurance companies, namely Asia, Alborz, Dana,Parsian Karafarin, Razi, Tose e, Sina, Mellat, Hafez, Omid, Day, Saman, Novin, Pasargad, Moallem, Iran Moein, Mihan, Kosar, Ma, Arman, Taavon, Sarmad, Asmari, Kish P&I Club, QITA P&I Club (Qeshm), Amin Re, and Iranian Re, whereas there is only one governmental insurance company, known as Iran Insurance Co. The volume of total direct premium for the market this year amounted to IR Rls. 131,097 billion, signifying growth rate of 52.3 percent over the last year. The insurance penetration went beyond 1.9 percent and is ever increasing. In the year under review, motor insurance (T.P.L.) with 53.5 percent, health insurance with a considerable growth rate of 74.8 percent, and life insurance with 49.2 percent, had the greatest contribution in the overall market growth. Motor (T.P.L.) premium income increase is due to high loss ratio which is typical in the Iranian insurance market over the past years. Although this loss ratio indicates an increase of 0.4 units compared with last year, our efforts are directed towards maintaining loss ratio at about 90 percent. All in all, Motor Third Party Liability with a direct premium of IR Rls. 59,595 billion or 45.5 percent of the total market premium, earned the highest market share followed by health with IR Rls. 26,527 billion, life with a direct premium of IR Rls. 10,248 billion, motor (P.D.) with IR Rls. 8,219 billion, accident with IR Rls. 8,064 billion and liability with IR Rls. 6,778 billion, respectively. In the year under review, Iranian insurance industry issued about 38.5 million policies, representing 7.4 percent increase over the last year. Total paid losses also amounted to IR Rls. 78,380 billion, i.e. 46 percent increase compared with 2011 (1390). The highest share of paid losses is held by motor (T.P.L.), whereas health with 48.4 and 29.1 percent, motor (P.D.), liability, and life with 6.5, 4.6, and 4.5 percent of the total paid loss occupy next positions. Moreover, the overall market loss ratio, which delineates incurred loss to earned premium, was 82.9 percent by 6.7 units increase. In the year 1391 ( ), Bimeh Markazi had a written reinsurance premium of IR Rls. 35,588,881 million from local compulsory and optional reinsurance accepted from national and international markets. Total reinsurance accepted in 1391 shows an increase of percent over the preceding year. The volume of retrocession is IR Rls. 973,079 million, whereas the retention is IR Rls. 34,609,802 million. In 1391, total reinsurance paid losses by Bimeh Markazi amounted to IR Rls. 20, million, precisely 91,7 percent of which was paid in different branches of non-life business and 8.3 percent in life insurance.during this year, total losses, recovered through reinsurance treaties, amounted to IR Rls. 120,295 million. Investment income of Bimeh Markazi for the year 1391 reached IR Rls. 3,404,851 million, showing an increase of IR Rls. 1,111,078 million or percent over the past years.

4 Minister s Note Ali Dr. Tayyebnia Tayebnia Minister of Economic Affairs & Finance Head of General Assembly in Bimeh Markazi Fundamentally, establishment of any social or economic foundations is goal-oriented. As far as insurance industry is concerned, its ultimate aim is to assure peace of mind for not only people from all walks of life, but also every single individual who plays role in the realm of economy, production, and investment, while it is expected to pave the way for productivity and dynamism for communal contribution. This signifies foremost strategic function of the insurance industry simply because it is a constituent part of financial market that possesses substantial share in economic growth across the globe. We anticipate that insurance penetration rate increases to considerable extent during the presidency of Mr. Amin, through cooperation and coordination of our qualified colleagues in Bimeh Markazi Iran (Central Insurance of I.R. Iran) along with insurance companies so that we shall witness the development of our industry. As a supervisory-regulatory organization, Bimeh Markazi ought to devise an innovative supervision structure only if it benefits from universal standards, while paying particular attention to non-tariff models, so that our vision shall be realized, God willingly. Ceramic mosaic with polychrome glaze. Isfahan-Iran 6

5 Bimeh Markazi Iran (Central Insurance of I.R. Iran) began a new phase of its legal obligations, by means of modern models and mechanisms adopted from global insurers expertise, while taking heed of current socio-economic status of our nation. Replacing tariff system and compulsory reinsurance with financial supervision system is of prime importance. PRESIDENT S MESSAGE Principal parameters concerning modern supervision system for perfomance assessment of commercial insurance companies encompass financial solvency, adherence to accounting standards, appropriate allowance method based on regulations ratified by High Council of Insurance, asset-liability combination, approches to profit identification and distribution, sovereignty corporate principles establishment, capital and reserves efficiency methods compliant with underwriting requirements, internal control system, rate setting based on risk assessment and technical calculations, precision and promptitude in loss adjustment and fair claim settlement, professional qualification assessment of managing directors for insurance companies, implementing customer-oriented paradigm in Customer Relationship Management, and adherence to Client Tribute Plan in a market framework free from monopoly or collusion, rather roots in competition, professionalism, resourcefulness, and innovation. 8 9

6 High Council of Insurance One of the constituent organs of Bimeh Markazi is the High Council of Insurance (HCI), with the prerogative to approve decrees and by-laws. The Council is is comprised of of President of of Bimeh Bimeh Markazi Markazi as its as Head,Vice its Ministers Vice Ministers of Economic of Economic Affairs and Affairs Finance, and Finance, Cooperatives, Labor and Labour Social and Social Affairs, Welfare, Commerce, Industry, and Agriculture, Mine and Trade, together and with Agriculture, five authorities together and with senior five experts authorities from the and Iranian senior insurance experts from market. the Duties Iranian of insurance the High market. Council Duties of Insurance of the are High as Council follows; of Insurance are as follows; To consider and comment on the issuance of establishment, permission or cancellation of such permission of insurance organizations in accordance with the provisions of this law, and to make due recommendations to the General Assembly To approve form of the balance sheet to be used by insurance organizations To specify various types of insurance transactions, and general conditions to be included in insurance policies, and to supervise reinsurance operations To determine the rate of commission and insurance premium relating to various types of direct insurance operations To approve necessary by-laws governing work in the field of providing guidance on insurance operations and activities of insurance companies To consider and to comment on the report from Bimeh Markazi Iran (Central Insurance of I.R. Iran) regarding the operations and activities of insurance organizations in Iran, that shall be submitted at least once every six months 7 To comment on any proposals submitted by the Head of HCI 8 To perform other duties as determined for it by this law M. E. Amin Head President Bimeh Markazi Iran/ Central Insurance of I.R. Iran A. Bakhshandeh Member Vice Minister Ministry of Agriculture (Jihad) M.R. Sepehri Member President Labor & Social Security Institute J. Mosaddeghi Member Delegate Iranian Chamber of Commerce, Industries, Mines & Agriculture N. Mazloomi Member Insurance Expert General Assembly M. Parizi Member Vice Minister Ministry of Economic Affairs & Finance H.A. Mehrizi Member Vice Minister Ministry of Industry, Mine, and Trade M. Amrollahi Member Managing Director Iran Insurance Co. Gh. Gholami Member Delegate Iran Insurers Syndicate B. Pourseyed Member Legal Expert General Assembly 10

7 12 Public Relations Auditors Insurance Research Center Bodily Injury Indemnity Fund Affiliated Organizations Reinsurance Accounts & Reserves Investment & Assemblies Finance Human Capital Development & Support Management & Resources Development Vice Presidency Security Organization Chart Legal Insurance Firms Supervisory Technical Supervision Financial Supervision Supervision Vice Presidency Presidential Office International Insurance Cooperation Office Compulsory Reinsurance Marine & Aviation Reinsurance Safety & Loss Prevention Insurance Firms & Institution Admission Planning & Development Office Technical Office Fire, Engineering, Oil & Energy Reinsurance Performance Assessment, Internal Audit & Complaints Accountability Office Planning & Development Vice Presidency Anti-Money Laundering Office Council of Jurisprudence High Council of Insurance Reinsurance & International Affairs Vice Presidency Information & Communication Technology Office Deputy President President Management Board General Assembly Management Board Mohammad Ebrahim Amin President Vice President Reinsurance & International Affairs Mina Sadigh Noohi Rahim Mosaddegh Vice President Planning & Development Habib Mirzaei Vice President Supervision Seyed Morteza H. Aghda Vice President Management & Resources Development 13

8 Insurance Activities in Iranian Free Trade Zones Amin Reinsurance Co. Omid Insurance Co. Hafez Insurance Co. Iran Moein Insurance Co. Kish P&I Club QITA P&I Club (Qeshm) Asmari Insurance Co. There are six free trade zones in Iran, known as Kish Island, Qeshm Island, Chabahar Port, the free zone of Arvand, Aras, and free zone of Anzali. The first two are located in the middle of the Persian Gulf and the third shore is in the Oman Sea. The free zone of Arvand is located in Khuzestan province, southeastern Iran. The free zone of Aras is located near Aras River in the northern border of Iran. The last not the least, the free zone of Anzali is located in the southern coast of the Caspian Sea. Aside from these six major free zones, numerous economic, industrial and trade zones also exist in different areas of Iran. At a meeting held on 23 August 2000, on the basis of the proposal by Bimeh Markazi and by virtue of Article 28 of Law on the Administration of Free Trade-Industrial Zones in the Islamic Republic of Iran (ratified in 1999), the Council of Ministers approved the Regulations on Establishment and Operation of Insurance Institutions in the Free Trade-Industrial Zones in the Islamic Republic of Iran. Based on the proposal of the Authority and under the provisions of these regulations, insurance and reinsurance operations in the Free Trade Zones shall take place through institutions that obtain permission from Bimeh Markazi Iran (Central Insurance of I.R. Iran) and must be registered in one of the following forms; 1. Iranian joint-stock or cooperative insurance companies with real and/or legal Iranian and/or foreign shareholders with registered shares 2. Insurance agency and/or brokerage institution Institutions authorized to operate in the Zone, within the framework of these regulations, are not permitted to provide insurance for people residing, subjects and matters located in other parts of the country and transport insurance for goods imported to other parts of the country, the purchase contract of which is concluded of its letter of credit is opened in Iran. Reinsurance transactions are excluded from this Article. More importantly, the minimum capital for insurance institutions, insurance agents and insurance brokers are as follows; 1. Direct insurance institutions are to be established with a minimum capital of IR Rls. 15 billion, at least 50% of which must be paid initially; 2. Mutual insurance institutions are to be established with a minimum capital of IR Rls. 200 million, at least 50% of which must be paid initially; 3. Reinsurance institutions are to be established with a minimum capital of IR Rls. 85 billion, at least 50% of which must be paid initially; 4. Insurance agencies and/or brokerage institutions are to be established with a minimum capital of IR Rls. 300 million, at least 50% of which must be paid initially. Upon these regulations, seven private insurance and reinsurance companies have been registered so far in the Free Trade Zones. Regulations on Establishment of Foreign Institutions Foreign insurance companies have been permitted by Iranian Cabinet to set up contact offices in the mainland following amendments to former regulations authorizing operation of foreign insurance institutions in the Iranian Free Trade Zones (FTZs). In the amendment, an additional note has been affixed to Article 1 of the ratification according to which insurance companies, registered in the Iranian Free Trade Zones, can set up contact office across the country to facilitate links with Bimeh Markazi Iran (Central Insurance of I.R. Iran) and other concerned organizations. Bimeh Markazi outlined regulations to implement them. Before this amendment, Iranian High Council of Insurance (HCI) approved and published the regulations on the establishment of contact offices of foreign insurance and brokerage institutions in the Islamic Republic of Iran. Highlights of the said regulations are as follows; Foreign insurance and brokerage institutions are allowed to open their contact offices in the Islamic Republic of Iran, after securing the approval of Bimeh Markazi. These contact offices are subject to the laws of the government of the Islamic Republic of Iran and their operation, as the operation of a legal person is allowed within the framework of these laws and regulations that govern Iranian insurance industry. Contact offices are allowed to liaise between their mother company and Iranian insurance institutions to follow up the reinsurance affairs, to offer technical services and to provide insurance technical know-how. However, they are not permitted to offer insurance and to operate in those fields that are within the exclusive duties of the local insurance institution. Bimeh Markazi shall supervise the operation of these contact offices, on the basis of its lawful duties. Foreign insurance institutions can dissolve and / or temporarily close their contact offices in Iran, after informing Bimeh Markazi and through legal procedures. If and when a contact office, at the discretion of Bimeh Markazi, violates the regulations, Bimeh Markazi can highlight the case by sending a note or a warning or, can prevent its further operation by the approval of the President of Bimeh Markazi. The procedure for establishment, rules of operation and dissolution of contact offices have been done and published by Bimeh Markazi within the framework of these regulations

9 Our Directors General Mohammad Mahdi Mahmoudi Presidential Office Faranak Hovanloo Marine & Aviation Reinsurance Mehdi Norouzi Information & Communication Technology Seyed Omid Miraghazadeh Reinsurance Accounts & Reserves Reza Mostafavi Insurance Firms & Institutions Admission Farzin Hajati Technical Office Shahriar Sheibani Public Relations Nooshin Taghi Khataei Fire, Engineering, Oil & Energy Reinsurance Seyed Dr. Seyed Javad Mirghassemi Legal Service Nima Momenizadeh Anti-Money Laundering Mehdi Namanalhosseini Planning & Development Hamid Reza Navabi Compulsory Reinsurance Soraya Charkhchi Human Resources Development & Support Ramin Ala International Insurance Cooperation Farzaneh Ghartakini Technical Supervision Shahram Sheibani Safety & Loss Prevention Amir Hossein Farsi Finance Ali Shokri Inspection, Performance Assessment, Internal Audit Dr. Mohammad Javad Javad Aghajeri Aghajeri Insurance Firms Service Supervision Offices Supervision Ali Jafari Financial Supervision Mahmoud Haghverdilou Investment & Assemblies

10 I.R.: Islamic Republic of Iran } Green Card System Section III European Economic Area ECO E c o n o m i c C o o p e r a t i o n O r g a n i z a t i o n GREEN CARD SYSTEM The international compensation system of victims of road traffic accidents namely, the Green Card System, facilitates the flow of cross border road traffic in member countries of the system, and guarantees the compensation of domestic victims of accidents caused by foreign motorists. The system, which started in 1949, has been in place for more than 60 years helping millions of motorists travelling across border network of member countries of the system. The Green Card is equivalent to the national motor insurance certificates of each and all countries which a motorist visits. Thus, it is accepted without any obstacle or cost by the authorities of all countries for which the individual Green Card is valid. It certifies that the visiting motorist has at least the minimum compulsory third party insurance coverage required by the laws of the countries visited. Any motorist with a Green Card is able to travel across the borders of 45 member countries without the need to take out an insurance policy at each country border. The Green Card covers all liabilities and is accepted as the evidence of insurance and meets with the law of the country being visited. In each member country of this system, there exists a bureau operating by the recognition and approval of their governments, dealing with Green Card affairs. Therefore, the network of Green Card Bureaux helps claims arising from traffic accidents to be settled for all the third parties involved in an accident caused by a foreign motorist. Each nation s bureau will work with the liable motorists insurer and its concerned bureau to effectively settle the claim according to the rules set out by that country. National Bureaux cooperate on the basis of the Internal Regulations signed bilaterally among them. According to the Act of Adhesion of Iran Government to the International System of Civil Liability Insurance of Land Motor Vehicles against Third Party (Green Card), approved on , Green Card Bureau of Iran commenced its activities in Tehran under the supervision of Bimeh Markazi Iran (Central Insurance of I.R. Iran). Moreover, on the basis of the said law, all Iranian insurance institutions authorized to perform compulsory insurance operations regarding civil liability of owners of land motor vehicles against third party, are obliged to accept the membership of the said bureau. Presently, only Iran Insurance Company operates as its member, deals with issuing Green Cards while handling and settling Green Card claims. ECO WHITE CARD SCHEME Iran is geographically located in the center of ECO region and is a transit route for many ECO countries. Accordingly, our country has a significant role in transit transport in the region and is known as the initiator of a unified Motor Vehicle Third Party Liability Insurance Scheme (namely the ECO White Card Scheme). The ECO White Card will be an official evidence of compulsory civil liability insurance concerning the use of motor vehicle, in any visited member country of the ECO region, contracting parties of the said Scheme. Main Objectives of the ECO White Card Scheme are as follows: To facilitate the international circulation of motor vehicles by enabling insurance of third party liability risks in respect of their use, in the case of accidents To guarantee compensation of injured parties in accordance with national laws and regulations of the ECO member countries of the Scheme To establish the Motor Vehicle Third Party Liability Insurance System among the ECO Region The proposal to prepare ECO White Card Scheme dates back to 1997, during the Fifth ECO Summit, in which grounds for Motor Vehicle Third Party Liability Insurance agreement in the ECO region were made and promotion of cooperation among ECO Member States in the field of insurance was realized- as mentioned in Article 22 of TTFA (Transit Transport Framework Agreement) and its Annex No. 5. According to the proposal made by the 10 th RPC (Regional Planning Council), held on February 2000 in Tehran, Islamic Republic of Iran (Bimeh Markazi) was appointed as the responsible country to do the above mentioned task and to host the First Meeting of ECO insurance authorities from ECO member states to consider White Card Scheme proposed and prepared by Bimeh Markazi. Accordingly, during the said meeting held in Bimeh Markazi on September 6-7, 2005, the participating ECO members states emphasized on the necessity of establishing a common insurance coverage scheme, applicable to all ECO member states, aiming at facilitation of smooth movement of carriers in the region. Finally, the ECO White Card Scheme was approved and adopted by the ECO member states on May 2007, which is still under implementation process

11 Insurance Research Center Bodily Injury Indemnity Fund Dr. Mahdavi Head For the purpose of supervising insurance researches and developing a fine infrastructure for the growth of insurance industry, the first insurance research office was established in It was organizationally under the management of Bimeh Markazi. In February 2000, the General Assembly of Bimeh Markazi authorized the foundation of the Insurance Research Center (IRC). In May 2004, the establishment of IRC was officially conceded by the Higher Education Development Council of the Ministry of Science and Technology and three research groups were initially developed in the following areas; Property and Liability Insurance, Personal Insurance, and General Studies in Insurance. In 2006, two new groups were added to IRC research body, namely the Cyber-Insurance and Islamic Studies of Insurance Research Groups. Since then, IRC has developed five research groups. It is noteworthy that under the Deputy of Research Supervision, sponsoring theses at master s and Ph.D. degree, multiple large-scale research projects have been accomplished since 2009, while several fundamental research projects have been undertaken and many more are anticipated until the end of In 2012 alone, 180 dissertation projects have been sponsored by IRC, out of which 84 are ongoing projects and 96 have been completed to the end of the year. Responsibilities of Insurance Research Center as noted in its charter are as follows; To provide necessary facilities for research activities in Iranian insurance industry To undertake fundamental, applied, and developmental research plans for industry development To promote collaboration with foreign and domestic universities plus academic institutes To provide consultation services to anyone interested based on the latest research findings To publish academic journals, books, training booklets, and software required for professional training To organize academic conferences and to present research findings R. Jafari Head History In our country, the Compulsory Civil Law of the Third Party Liability Insurance for Owners of Land Motor Vehicles was approved on ( ). Forty years later, its Law Amendment was approved on ( ) under the chronological, local, legal and economic circumstances. The Bodily Injury Indemnity Fund was established according to Article 10 of Law Amendment of the Compulsory Civil Law of Third Party Liability Insurance for Owners of Land Motor Vehicles and its Bylaw was approved on ( ) by the Board of Ministers. Consistent with Article 3 of the Administration Regulations, approved on ( ), the Bodily Injury Indemnity Fund is comprised of General Assembly, Supervision Board, Head of Fund, and Auditors. More importantly, the Fund General Assembly consists of four Ministers of «Economic Affairs and Finance», «Industry, Mine and Trade», «Justice», «Cooperatives, Labour and Social Welfare», along with the President of Bimeh Markazi Iran (Central Insurance of I.R. Iran). The Head of the Fund is proposed by the President of Bimeh Markazi and approved by the General Assembly for a term of four years. The Head of the Fund is a member of the Supervision Board, as well. Publications As for periodicals, the «Iranian Journal of Insurance Research» is a quarterly rated as IF (Impact Factor) by the Islamic World Science Citation Center. It has received Scientific-Research Grade by the Scientific Journal Examination Committee of the Ministry of Science, Research and Technology. One hundred and ten issues have been published since its first publication. In 2012, 272 articles have been received by the journal office out which 34 articles have been published. Besides, the «Working Paper» is a bimonthly by the Deputy of Research of IRC fundamentally focused on insurance-related case studies and theoretical issues. Since 1998, 69 issues of the Working Paper have been published. In 2012, this bimonthly has received 75 articles out of which 6 articles have been published. «Insurance Studies» is another quarterly, approved by the Ministry of Culture and Islamic Guidance in 2013, which is going to be published in the future to disseminate general applied ideas on insurance. It will be soon graded by the Ministry of Science, Technology and Research. Moreover, for the purpose of publishing new findings and events in insurance industry, «Insurance World Updates» was first published in Thus far, 182 numbers of this monthly have been published. It is the first informational and analytical insurance industrial magazine permitted to be circulated nationwide. In 2012 only, this journal has received 114 articles out of which 47 articles have been published. Books Insurance Research Center has published approximately 108 books since 2008 in various areas of insurance and based on the requirements of the insurance society. In 2012, forty seven books have been published. The complete list of the published books can be accessed through Mission In accordance with Article 10 of the Motor TPL Insurance Law Amendment on grounds of protecting driving accident victims and compensation for bodily injury to Third Parties due to the lack or expiration of the insurance policy, insurer insolvency, or just in case the insurance contract is void, or the insurance coverage is suspended, provided that liable person for the accident is not declared - hit and run, or bodily injuries are beyond the insurance policy conditions, (excluding definite cases in Article 7 of Law Amendment of Motor TPL Insurance Law), claims will be paid by an independent fund, i.e. Bodily Injury Indemnity Fund. Statistics Statistical information from 1387 (2008) till the end of 1391 ( ) are summarized in the following table; Paid Loss Amounts in Billion IR Rls Year Number of Cases Number of Amount Share (%) Injured People 1387 (2008) (2009) (2010) (2011) (2012) Total Amounts in Billion IR Rls 1387 (2008) 1388 (2009) 1389 (2010) 1390 (2011) 1391 (2012) Academic Cooperation To educate insurance professionals, Insurance Research Center has put its earnest efforts to promote its cooperation with national and international universities and academic institutions. Since its establishment, IRC has signed many MoU s and agreements with national and international academic institutions such as the College of Economy, Tehran University, Shahid Beheshti University, ECO College of Insurance, Sharif University, Mazandaran University, Gulf International Institute (Bahrain), and Malaysian Institute of Insurance (MII). The purpose of these collaborations is to expand continuing and professional education as well as training courses, workshops, seminars, and educational tours for all players of insurance industry which is why IRC is considered to be the vehicle for cultivating the Iranian insurance industry Number of Cases 1387 (2008) 1388 (2009) 1389 (2010) 1390 (2011) 1391 (2012) 20 21

12 Iranian Insurance Companies Iranian Insurance Market During the year 1391 (2012), two companies, namely Asmari and QITA P&I Club (Qeshm) joined the private section. Thus, one state-owned insurance company, namely Iran Insurance Co., and twenty six non-state owned insurance and reinsurance companies are operating in Iran, including Asia, Alborz, Dana, Moallem, Parsian, Karafarin, Razi, Tose e, Sina, Mellat, Hafez, Omid, Day, Saman, Novin, Iran Moein, Pasargad, Mihan, Kosar, Ma, Arman, Kish P&I Club, QITA P&I Club, and Asmari that produced a total direct premium of IR Rls. 131,097 billion; along with Amin Re and Iranian Re that are major reinsurance companies operating in Iran. The increase in the volume of total premium, compared with last year, was IR Rls. 45,005 billion, representing an increase of 52.3 percent. The following table shows the rising trend in the volume of premium over the last five years. Insurance Market Direct Premium in 5 Years (Million IRR) R Year Amount Growth Rate (%) Iran Insurance Co. Alborz Insurance Co. Alborz Insurance Co. Dana Insurance Co. Asia Insurance Co. Parsian Insurance Co. 1387(2008) 40,560, (2009) 46,438, (2010) 59,161, (2011) 86,092, Razi Insurance Co. Mellat Insurance Co. Moallem Insurance Co. Karafarin Insurance Co. Pasargad Insurance Co. 1391(2012) 131,096, Insurance Market Direct Premium in 5 Years Iran Moein Insurance Co. Day Insurance Co. Iranian Reinsurance Co. Tose e Insurance Co. Saman Insurance Co Mihan Insurance Co. Sina Insurance Co. Novin Insurance Co. Hafez Insurance Co. Kosar Insurance Co Omid Insurance Co. Amin Reinsurance Co. Kish P&I Club Arman Insurance Co. Ma Insurance Co. QITA P&I Club Taavon Insurance Co. Asmari Insurance Co. Sarmad Insurance Co Amounts in Billion IR Rls 1387 (2008) 1388 (2009) 1389 (2010) 1390 (2011) 1391 (2012) 22 23

13 Insurance Market Direct Premium 1391 (2012) Insurance Market Paid Loss 0.2% 0.9% 1.3% 0.7% 1.2% 5.2% 0.1% 0.9% 7.8% 3.7% 6.2% 6.3% Fire Cargo Accident Motor (P.D) Motor (T.P.L) Health Hull In 1391 (2012), as in previous years, the share of paid loss for Motor Third Party Liability has a major share. This is mainly attributed to the upward trend in the court reward for blood money (Dieh Claim) and the number of car accidents. It is mentionable that 55% of total paid loss amount of our market belongs to Motor (T.P.L. and P.D.). Besides, health insurance market paid loss with 29.1% is noticeable due to an abnormal competition in this field and the rising reimbursements of healthcare expenses.the positive growth rate for paid loss in all classes except credit, oil & energy, aviation, engineering, and cargo resulted in the overall 46 percent growth for the total paid loss of The following table displays comparative statistics of paid loss, the percentage share of each insurance class in the market, and the growth rates; Insurance Market Direct Premium Aviation 20.2% Engineering Liability Credit 45.5% Oil & Energy Life Others The comparative detailed development of direct premium, the percentage share of each market, and the growth rates can be viewed in the following table; (Million IRR) class 1390 (2011) 1391 (2012) Amount Share(%) Growth(%) Amount Share(%) Growth(%) Fire 4,083, ,810, Cargo 844, ,173, Accident 4,330, ,064, Motor (P.D) 6,313, ,218, Motor (T.P.L) 38,836, ,595, Health 15,179, ,526, Hull 751, ,171, Aviation 619, , Engineering 1,498, ,557, Liability 4,594, ,778, Credit 490, , Oil & Energy 1,568, ,659, Life 6,869, ,248, Others 111, , Total 86,092, ,096, class 1390 (2011) 1391 (2012) Amount Share(%) Growth(%) Amount Share(%) Growth(%) Fire 945, ,765, Cargo 267, , Accident 1,106, ,433, Motor (P.D) 4,147, ,082, Motor (T.P.L) 26,814, ,956, Health 14,936, ,822, Hull 229, , Aviation 183, , Engineering 559, , Liability 1,814, ,592, Credit 91, , Oil & Energy 240, , Life 2,330, ,547, Others 29, , Total 53,698, ,379, Insurance Market Paid Loss 1391(2012) 0.2% Credit 0.005% 2.3% 0.5% 0.1% 0.1% 0.4% 29.1% 0.3% 4.5% 3.1% 4.6% 6.5% Fire Cargo Accident Motor (P.D) Motor (T.P.L) Health Hull Aviation Engineering Market direct premium of accident, health, and motor (T.P.L) classes shows the highest growth rate of 86.2, 74.8 and 53.5, respectively in 1391 ( ) compared with the previous year. The premium for life insurance recorded an acceptable growth of 49.2% during this year. All insurance classes, except for credit have an acceptable growth.the negative growth of credit insurance with increased volume of premium for other thirteen classes have resulted in the overall 52.3 percent growth for the total premium of 1391 ( ). Figures for other insurance classes are mainly composed of premiums for money and a number of different branches with low premium volume (totally 0.1%) in the market. 48.4% Liability Credit Oil & Energy Life Others 24 25

14 Comparative statistics for the Iranian insurance market earned premium, incurred loss, and loss ratio over the last five years are depicted here. Earned Premium, Incurred Loss & Loss Ratio (Million IRR) Year Earned Premiums Incurred Loss Loss Ratio(%) 1387 (2008) 33,825,409 25,249, (2009) 41,774,258 31,245, (2010) 52,347,521 41,121, (2011) 70,870,334 54,052, (2012) 99,876,116 82,823, Insurance Market Earned Premium & Incurred Loss (Billion IRR) Incurred Loss Earned Premium Insurance Market Earned Premium & Incurred Loss (Billion IRR) Loss Ratio Earned Premium Incurred Loss % % %120 %100 %80 %60 %40 %20 %0 Market 82.9% Others LIfe Oil &Energy Credit Libility Engineering Aviation Hull Health Motor (T.P,L) Motor (P.D) Accident Cargo Fire Others LIfe Oil &Energy Credit Libility Engineering Aviation Hull Health Motor(T.P,L) Motor(P.D) Accident Cargo Fire 26 27

15 Earned Premium, Incurred Loss, Loss Ratio The branch-wise direct earned premium and the incurred loss along with the loss ratio are shown in the table below; class 1390 (2011) 1391(2012) Earned Premiums Incurred Losses Loss Ratio(%) Earned Premiums Incurred Losses Loss Ratio(%) By the end of 2012 (1391), 27 insurance companies, 867 branches 30,958 agents, 415 official brokers, 3,415 life insurance agents, and 175 loss adjusters are active in Iranian insurance market. Thus, by increasing the number of insurance companies in the country, the employment has increased in insurance industry as well, and until the end of the year 1391 ( ), about 17,640 individuals were functioning in insurance companies. Fire 3,917,518 1,143, ,390,355 2,030, Cargo 815, , ,075, , Accident 3,236,325 1,100, ,627,682 2,957, Motor (P.D) 6,045,575 4,169, ,167,627 5,304, Motor (T.P.L) 30,802,437 27,662, ,702,048 40,341, Health 15,021,385 15,094, ,353,336 23,052, Hull 800, , , , Aviation 605, , , , Engineering 1,451, , ,500, , Liability 4,081,857 1,653, ,763,063 4,194, Credit 486,584 47, , , Oil & Energy 1,075, , ,013, , Life 2,423,783 1,596, ,369,234 2,333, Others 106,180 28, ,789 62, Total 70,870,334 54,052, ,876,116 82,823, Considerable share and high loss ratio in TPL and health have contributed to the maintenance of the total loss ratio of the market at about 82.9 percent. Number of Insurance Companies Amounts in Billion IR Rls 1387 (2008) 1388 (2009) 1389 (2010) 1390 (2011) 1391 (2012) Sales Network in Iranian Insurance Market Sales Network of Insurance Industry Item 1387(2008) 1388 (2009) 1389 (2010) 1390 (2011) 1391(2012) No. of Companies * No. of Branches No. of Brokers No. of Agents No. of Life Insurance Agents No. of Loss Adjuster No. of Policies 28,569,285 29,478,857 31,931,184 35,880,048 38,526,659 No. of Claims 3,641,654 4,024,834 6,692,495 8,877,434 13,140,049 Year/ Nubmer Companies Employees Branches Agents Life State Owned Companies Private Companies State Owned Companies Private Companies Insurance Agents Brokers 1387 (2008) (2009) (2010) (2011) (2012) Loss Adjuster * Two of the companies just do reinsurance operation in 1391 (2012)

16 Iran s Share in Global Market and the Zone in 1391 (2012) In the year 1391 (2012), the share of insurance industry of Islamic Republic of Iran from produced premium of global insurance market was 0.23 percent and in the insurance market of the Zone was 19.4 percent. The premium of Iranian insurance industry has increased from 7 billion Dollars in 1390 (2011) to 10.7 billion Dollars in 1391 (2012). Thus, the Islamic Republic of Iran s worldwide rank is 42 in terms of premium production. The insurance premium in Iran per person has increased from 1.1 million Rials (94 Dollars) in 1390 (2011) to 1.7 million Rials (140 Dollars) in 1391 (2012). The Insurance penetration rate of the Islamic Republic of Iran increased to about 1.9 percent this year. Iranian Share of Direct Premium in Global Insurance Market Share of Insurance Companies At the time of privatization movement in insurance industry in the year 1382 (2003), the share of non-governmental insurance companies from market s premium increased; in the year 1391 (2012), about 54.4 percent of market s premium and 50.1 percent of market s loss belonged to this section. Year Share of World Market (in %) Share of Zone Market (in %)* 1387 (2008) (2009) (2010) (2011) (2012) * The Zone specified in rule document of 20 years vision in I.R. Iran for 1404 (2025) that includes 25 countries. Share of Private Companies of Insurance Market Share of All Companies in Iranian Insurance Market Year Share of Direct Premium Share of Paid Loss State Owned Companies Private Companies State Owned Companies Private Companies 1387 (2008) (2009) (2010) (2011) (2012) Share of Direct Permium 1387 (2008) 1388 (2009) 1389 (2010) 1390 (2011) 1391 (2012) Share of Paid Loss 1387 (2008) 1388 (2009) 1389 (2010) 1390 (2011) 1391 (2012) (In %) Insurance Density & Penetration Iranian Economy & Worldwide Rank of Insurance Year Iranian Insurance Iranian Economy Direct Premiums * Rank Insurance Density ** Rank Insurance Penetration (%) *** Rank 1.9 Gross Domestic Product (GDP) * 1387 (2008) 40, ,378, , (2009) 46, ,562, ,834 Rank (2008) 1388 (2009) 1389 (2010) 1390 (2011) 1391 (2012) % Insurance Penetration Exchange rate (Rls) to (US$) 1389 (2010) 59, ,304, , (2011) 86, ,101, , (2012) 131, , * In Billions of Rls ** Premiums per Capita (in Million of Rls) *** Direct Premiums divided on GDP 31

17 Balance Sheet /As at ( ) Million IRR Items Liability & Equity Current Liability Amount Due to Local Insurance Co. 1,714, ,612 Amount Due to Foreign Insurance Co. 120,484 44,778 Financial Statements Deposit on Premium Ceded Creditor & Dividend 28, ,001 14, ,377 Other Liabilities 1,072,011 1,743,574 3,061,384 2,532,518 Balance Sheet /As at ( ) Million IRR Long Term Liability Employees Funds 85,823 85,823 69,222 Items ,147,207 2,601,740 Assets Technical Provisions Current Assets Life Cash & Cash Equivalents 2,389, ,078 Gross Provisions 10,251,061 7,482,381 Amount Due from Local Insurance Co. 9,145,046 6,236,574 Less Retroceded Bussiness Amount Due from Foreign Insurance Co. 263, ,526 10,251,061 7,482,381 Other Receivables 1,866,591 1,913,284 Non-Life Deposit on Reinsurance Accepted 117,722 68,493 Gross Provisions 22,189,143 15,623,345 13,782,303 8,918,955 Less Retroceded Bussiness 959, ,544 Investment 21,230,111 15,176,801 Short-term 6,736,991 4,490,254 31,481,172 22,659,182 Long-term 16,475,099 11,500,871 Equity 23,212,090 15,991,125 Issued Capital 1,200,000 1,200,000 Other Assets Legal Reserve 218, ,528 Tangible Assets & Inventories 1,285,554 1,072,444 Capital Reserve 406, ,030 Intangible Assets 6,789 6,481 Reserve for Foreign Currency Exchange 3,317, ,045 Tax Paid in Advance 1,059, ,997 Net Profit 117,735 (358,402) Other Assets 542, ,121 5,260,271 2,894,257 2,419,043 5,260,271 2,068,201 TOTAL ASSETS 39,888,650 27,329,123 Total Liability and Equity 39,888,650 27,329,

18 Notes to Financial Statements / Reinsurance Premium Accepted In the year 1391( ), Bimeh Markazi had a gross reinsurance premium of IRR 35,582,881 million showing an increase of IRR 11,968,605 or percent over the preceding year. The volume of non-life reinsurance premium amounted to IRR 30,731,234 million represented an increase of percent over the last year. The life reinsurance showed an increase of percent in the year 1391 (2012). The comparative figures for our reinsurance premium, accepted by the class of business, are shown below. Million IRR Income Statement / For the Years 1390 & 1391 on Annual Accounting Basis ( ) Million IRR Class 1389 (2010) 1390 ( ) 1391 ( ) Amount Amount Share (%) Growth (%) Amount Share (%) Growth (%) Items NOTE Fire 1,010,395 1,129, ,588, Technical Account Marine /Cargo 266, , , Earned Premiums Gross Written Premiums Retroceded Premiums Change in Gross Unearned Premiums Change in Retroceded Share of Unearned Premiums ,582,881 (973,079) 34,609,802 (5,990,216) 206,277 (5,783,939) 23,614,276 (665,702) 22,958,574 (4,345,652) 59,707 (4,285,945) Marine Hull 119, , , Accident 647,604 1,100, , Motor (P.D.) 1,357,778 1,570, ,047, Motor (T.P.L.) 6,030,589 9,657, ,488, Aviation 196, , , Engineering 345, , , ,825,863 18,672,629 Oil & Energy 252, , , Claims Incurred Health 2,830,526 3,763, ,609, Claims Paid Others 960,295 1,347, ,601, Gross Amount Retroceded Amount Change in Provision for Outstanding Claims Gross Amount 2 3 (20,619,944) 120,295 (20,499,649) (1,913,395) (14,066,566) 129,433 (13,937,133) (449,227) Life 2,348,244 3,433, ,851, Total 16,365,497 23,614, ,582, Reinsurance Claims Paid Million IRR Retroceded Amount Commissions Commission Paid Commission Received 306,210 (1,607,185) (22,106,834) (3,958,881) 150,167 (3,808,714) (123,791) (573,018) (14,510,151) (2,852,594) 98,250 (2,754,344) 1389 (2010) 1390 ( ) 1391 ( ) Class Amount Amount Share (%) Growth (%) Amount Share (%) Growth (%) Fire 228, , , Marine /Cargo 62,202 58, , Marine Hull 28,023 57, , Accident 191, , , (3,808,714) Motor (P.D.) 881,614 1,032, ,265, Changes in Other Technical Provisions (1,430,866) - Motor (T.P.L.) 4,995,534 6,679, ,458, Other Underwriting Expenses (3,785,276) (2,759,952) Aviation 56,448 60, , Investment Income Result of Technical Account Personnel & Administrative Expenses Other Income Net Retained Profits 3,354,758 1,048,931 (467,146) 688,517 1,270,302 2,298, ,067 (366,459) 307, ,407 Engineering 100, , , Oil & Energy 87,371 75, , Health 2,435,843 3,722, ,692, Others 375, , ,014, Life 848,835 1,164, ,707, Total 10,291,749 14,062, ,619,

19 Reinsurance Premium Accepted & Claims Paid 1391 ( ) 18,000,000 Reinsurance Premium Claims Paid Total Assets, Technical Reserves & Total Investment 45,000,000 40,000,000 Total Assets Technical Provisions Total Investment 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Fire Marine /Cargo Marine Hull Accident Motor (P.D.) Motor (T.P.L.) Aviation Engineering Oil & Energy Health Others Life Retrocession Premiums & Claims Collected Million IRR Retrocession Premiums Claims Collected Class 1390 (2011) 1391 (2012) 1390 (2011) 1391 (2012) Marine 207, ,759 79,843 59,089 Non - Marine 193, ,231 87,854 35,577 Oil & Energy 254, , ,736 25,629 Total 655, , , ,295 Total investment of Bimeh Markazi, with percent increase, amounted to IRR 23,212,090 million, at the end of 1391 (2012). Investment income for the year 1391 (2012) amounted to IRR 3,404,851 million, representing an increase of IRR. 1,054,370 million or percent over the previous year. Total assets at the end of the year, by percent increase amounted to IRR 39,888,650 million, of this figure percent represents liabilities and technical provisions and the remaining percent represents the capital funds. The retained premium of year 1391(2012) amounted 34,609,802 million corresponding to percent of life and non-life technical provisions of Bimeh Markazi Iran including reserves for unearned premiums and outstanding claims, amounted to a total of the IRR 31,481,172 million at the end of that year. Personnel and administrative expenses for the year 1391 (2012) amounted to IRR 467,146 million compared to IRR 366,459 million in the previous year. Net profit before tax for the years 1390 (2011) and 1391 (2012) amounted to IRR 888,407 million and IRR 1,270,302 million. 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000, (2010) 1390 (2011) 1391 (2012) Financial Highlights Million IRR Growth (%) 1391 Growth (%) Gross Premium 16,365,497 23,614, ,582, Retained Premium 15,825,149 22,958, ,609, % of Gross Premium Earned Premium 13,549,374 18,672, ,825, Incurred Loss 11,120,349 14,510, ,106, % of Earned Premium Net Claim 10,147,279 13,937, ,499, % of Retained Premium Investment & Other Income 2,061,922 3,062, ,497, General Expenses 215, , , % of Retained Premium Profit (Loss) 462, , ,320, Total Assets 21,256,846 27,365, ,888, Shareholders Equity* 1,524,166 2,104, ,260, Technical Reserve 17,800,219 22,659, ,481, Unexpired Risks 12,203,037 15,355, ,139, Outstanding Loss 2,946,946 3,519, ,127, Catastrophic Risk Reserve 3,312,105 3,783, ,214, Definitions: 1. Earned premium: Premium during year of account + Unearned premium at the end of preceding year of account - Unearned Premium at the end of year of account 2. Incurred Loss: Losses paid during the year of account + Reserve for outstanding losses at the end of year of account - Reserve for outstanding losses at the end of preceding year of account 3. Unexpired Risks: Part of premium not yet earned at the end of year of account (premium reserve at the end of year of account) ( * ) Reserve for foreign currency exchange included

20 Our Membership In addition to reinsurance operations, other international activities head the agenda of Bimeh Markazi. Part of its role in the international arena is to prove its image and standing as an internationally active reinsurance organization. Besides, it is presented in various international and regional cooperating bodies. Some of the major entities are as follows; Asian Reinsurance Corporation (Asian Re) Asian Re is a regional inter-governmental corporation established in 1979 through the initiative of UN/ESCAP to operate as a professional reinsurer. Federation of Afro-Asian Insurers and Reinsurers (FAIR) Its major objective is to foster collaboration in the markets of insurance and reinsurance among Afro-Asian countries through defined means. Some of the established entities within the framework of the Federation in which Bimeh Markazi is a member, are FAIR Non-Life Reinsurance Pool, FAIR Aviation Pool, FAIR Oil & Energy Insurance Syndicate. Economic Cooperation Organization (ECO) The ECO was established in 1985 as a trilateral organization of Iran, Pakistan, and Turkey to promote multi dimensional regional cooperation with a view of creating conditions for sustained socioeconomic growth in the member states. Its objectives as its modes of operation were identical to those of its forerunner, the Regional Cooperation for Development (RCD) which remained in existence from 1964 to Activities of ECO evolve projects and programs of mutual benefit in the fields of trade and investment, transport and telecommunications, energy, minerals and environment, agriculture, industry and tourism, human resources and sustainable development, project and economic research and statistics. WE TARGET SUPPORT & STABILITY Association of Insurance Supervisory Authorities of Developing Countries (AISADC) AISADC is entrusted to develop and expand interregional collaboration and cooperation in the field of insurance supervision or regulation, extend assistance to any developing country upon its request, in the establishment or strengthening of insurance supervision in such country. Association of Insurers and Reinsurers of Developing Countries (AIRDC) AIRDC is a non-political, non-governmental, non-religious and non-profit making association whose members are insurance or reinsurance entities, domestically incorporated and owned by nations, bodies and/or organizations of developing countries or areas, or other related insurance organization such as companies, broker(s), national association(s), research or training institute licensed or registered in any developing country or area. Green Card Bureau The International Motor Insurance Card System (known as the Green Card System) is designed to cater for the separate interests of traveling motorists and the party victims of such motorists in visited countries, through reciprocal cooperation of members under a uniform agreement between bureau. It came into operation in Iran has been a member since 1978 and is represented by Bimeh Markazi that administers the Iranian Bureau. 38

21 Bimeh Markazi Iran (Central Insurance of I.R. Iran) Address: No. 2, Insurance Tower, Africa Ave , Tehran, Iran P. O. Box: Protocol Dept.: Tel/Fax: pro@centinsur.ir