Auto insurance is the largest insurance business line in the market and despite the fact that any vehicle owner is compulsorily required to have auto insurance coverage, demands are not proportionate to the increasing number of the cars produced. Thus, identification of the effective factors in auto insurance sale is necessary. Given the high number of the cars which have no comprehensive insurance coverage (68%), it can be asserted that there is a great opportunity in this line of business in order to ultimately increase its penetration rate.

Based on the significance of this issue, Property and Liability Insurances Research Group of IRC has prepared and released a research project entitled “Exploration of the Ways to Increase Penetration Rate of the Comprehensive Car Insurance Line”.

Conducted by Azadeh Bahador and Ismail Fallahi using an applied approach, the research report outlines the reasons for the inappropriate growth of the comprehensive car insurance in Iran and provides some solutions to tackle such challenges. The compulsory level of the auto insurance policy is also examined against other countries with similar schemes.

According to the results of the report, some of the major reasons why comprehensive car insurance does not have the expected growth are as follows: “The problem of not purchasing coverage due to the economic conditions”, “The problem of not purchasing coverage due to the policyholder dissatisfaction”, “The problem of not receiving sufficient premiums by the insurers”, “The problem of not developing products based on the customer needs”, “The problem of mismarketing due to the sale networks”, and “The sale persons’ unawareness of the exact commission rates and policy issuance fees in this line of business”.
The insurance industry can increase the penetration rate of the comprehensive car insurance and its written premiums by enhancing its services and providing enough information regarding the benefits of auto insurance lines.   

Those interested to access and download the Persian full text of the aforementioned research report, please visit the following web address: https://www.irc.ac.ir/fa-IR/Irc/4946/Articles/view/14643/1593.