IRANIAN JOURNAL OF INSURANCE RESEARCH (SANAAT-E-BIMEH)
Year:2013 | Volume:28 | Issue:2 (110)|Papers Count:8

Recent changes in insurance industry in Iran and the privatization of insurance companies and their entry into stock exchange has created changes in ownership structure and company shareholdings. The present paper examines the role of institutional investors on the performance of insurance companies in Iran. Insurance companies are divided into two groups in this paper, those that are owned 50% or more by institutions and those with less than 50% ownership. We use percentage of institutional ownership as represented in board of directors to examine the role of institutional investors in insurance companies' decision making. In addition, we consider the rate of return on assets, rate of return on equity and profit growth rate to investigate company performances. This paper considers eleven private insurance companies in Iran and uses descriptive statistics to investigate a number of assumptions. Considering our results it can be argued that insurance companies in which institutional investors hold greater ownership have better financial performance compared to companies in which these investors hold less shareholdings. Thus higher share ownership by institutional investors in insurance companies could lead to making appropriate decisions and consequently better performance.

Entry deregulation in Iranian insurance market is among the most significant institutional changes in the last decade. As discussed in this paper, there are very few researches on this subject, if any, in Iranian insurance market. We review the institutional economics approach and propose a two step procedure to conduct this research. In the first step, we propose a robust optimization approach to overcome any uncertainty in output especially incurred losses and return on equity. Insurers’ efficiency scores are then calculated for an eight-year period from 2003 to 2010. In the second step, a statistical analysis using generalized estimating equations (GEE) is conducted to find the most significant factors which explain the efficiency scores.

This paper proposes an applied model for bancassurance in Iran. We suggest four successful models of bancassurance and discuss experts' comments on the feasibility of implementing these models using TELOS method. The three components of products, services and incomes of these banks in each model are studied. We use data analysis as in Analytical Hierarchy Process (AHP) and Expert Choice software. The results are consistent with the hypothesis that experts' view model of bilateral cooperation agreement between banks and insurance will be a suitable model of bancassurance in Iran. According to experts' view in this model it is better to offer group life and non-life and related banking products where bank employee carry out marketing and use insurance agents to sell insurance products. Thus banks keep a margin for every policy issued.

Insurable interest is an almost unknown concept in Iranian law which is limited to indemnity assurance. In English law, insurable interest is a fundamental concept both in indemnity and non- indemnity insurance while in Iranian law, consent of insured has been replaced for validity of the non-indemnity insurance (section 23 of the Iranian Assurance Act codified in 1316). In English law, insurable interest has been attended to for more than a century and there has been extensive research on economic and legal aspects. The Iranian Assurance Act like the France law only created a requirement that the insured must be able to demonstrate an insurable interest in the subject matter of the insurance but this act does not offer any indication to determine the consequences of lack of insurable interest in the contract. This paper concentrates on the necessity of the insurable interest in both indemnity and non-indemnity assurance in a comparative study. Consequently, the best sanction for the lack of insurable interest in Iranian law is determined.

The Iranian life insurance market is among the less developed markets in the world. We consider the share of life insurance in Iran and reveal its low share in comparison with global average. There are some studies conducted to unravel this phenomenon, but few or no comprehensive model has been proposed so far. In order to have a comprehensive framework, we use an institutional approach to identify and resolve this issue. By using an institutional approach, we are able to find out the most significant factors explaining the position of Iranian life insurance in the world.The main purpose of this research is to identify the most relevant institutions such as law, regulation, supportive businesses, and etc. that explain the life insurance market in Iran. In order to have a benchmark, we first study institutions of life insurance in the U.S.A. and India using Williamson's 4-levels of social analysis, and then based on our findings we develop a model to conduct the field research in Iran. Finally, the collected data from interviews are analyzed through open and axial coding methods in order to find the most significant institutions that should be modified or established in Iran.The main findings of our research identifies the institutions and effective organization in countries studied in this paper, institutions that reduce information asymmetry between insurer and insured, businesses that are capable of outsourcing, strategies for implementing institutions or essential organization in Iran insurance industry. Finally some practical recommendations for policy making are made.

Considering the importance of social capital and knowledge management, this paper aims to examine the relationship between social capital and knowledge management in an Insurance Company. We use descriptive and correlation methods. In order to collect data, questionnaires were used on social capital and knowledge management. The validity of these questionnaires was confirmed by established authorities in this filed and by the Cronbach's alpha which were 0.84 and 0.80 respectively. Pearson correlation and stepwise regressions were used to analyze the data. The findings show that there is a positive relationship between social capital and knowledge management. Also, the results show that all components of social capital have a significant and positive relationship with knowledge management. The regression results show that the social capital components (i.e. idealized influence, trust, networks, relationships and mutual understanding) can predict organizational know ledge management in Asia Insurance Company. The other components (i.e. commitment, values and cooperation) were eliminated from the equations due to lack of significance.

Organizational justice refers to employee feelings and perception of fairness and equality in work behaviors and relationships. Perception of organizational justice is a basic necessity in organizational performance and employee satisfaction. Therefore, organizations should do their best to achieve these criteria. On the other hand, organizational commitment is a crucial factor in forecasting employees' attendance to organizational survival and prevents wasting of capital. So managers should be committed to employee's organizational commitment. On this issue recent research surveys confirm the relationship between organizational justice and organizational commitment. Our target firm is an Insurance Company and its 295 employees who were chosen by the method of stratified random sampling from a total of 1270 personnel in central branch and various Tehran branches of this corporation. Organizational justice is the independent variable and organizational commitment is the criterion variable of this research. For every commitment and justice criteria there are three dimensions. This research consists of one main hypothesis and nine sub hypotheses. Our required data were collected through field research and produced questionnaires. Then the main and sub hypotheses were tested using SPSS & Liserel software. The results show that the main hypothesis was accepted and the fifth sub hypothesis was rejected and the other eight hypotheses were accepted. These results show that there is a positive and meaningful relationship between organizational justice and organizational commitment. The more managers attend to organizational justice, the more employees commit themselves to the organization.

Designing a system which is capable of predicting financial insolvency in insurance companies is a major task of each national insurance supervisory institute all around the world. Although there are many models and systems in different countries to do so, using these models in Iran's insurance industry is not possible. The reason is some restrictions and impediments related to this industry in Iran. However, a system that is able to assess financial solvency or financial health of companies and inform regulators is necessary. In the first step the prerequisites of using such systems and models are identifying factors affecting financial stability and health of insurance companies. In this paper, twenty four financial variables in five factors (capital adequacy ratios, profitability ratios, liquidity ratios, operational and risk ratios and other basic factors) affecting financial health were derived from the literature and tested in their relation to the independent variable.