CEO of Riton: Monopoly in the Insurance Industry Benefits No One
According to the latest report from the Central Insurance of Iran, the insurance penetration rate stands at 1.8% in Iran compared to 6.8% globally, with the market volume in Iran approximating 200 trillion IRR (about $3.3 billion). However, the market share of IT technology within the insurance industry is only about 0.5% of the overall market. The CEO of Riton believes that this small share of the digital insurance market in Iran requires a shift in approach and increased investment, asserting that monopoly in the insurance industry benefits no one.
Farhang Farzan, CEO of Riton, discusses the vision and goal behind the formation of Riton, stating, “We aimed to enhance the quality of insurance services provided by Dotin. Consequently, we leveraged our strengths, particularly our expertise in IT, following the model we had in banking with Dotin. With the support of Pasargad Insurance and our shared software experience in the financial industry, we established Riton in September 2023.”
Farzan explains that Riton’s insurance services, along with its Core product, have been operational not only with Pasargad Insurance but also with Hekmat and Baran Insurance. He notes, “Riton is essentially a spin-off from Dotin, with the Dotin team bringing all its products, resources, software, and human capital to Riton. Additionally, we now have a partner in Pasargad Insurance. After a decade of the current insurance software, it was time for a rewrite. We aimed to develop a product that fully covers the needs of an insurance company.”
Focus on Platform Development
Farzan identifies Riton’s target market as businesses, explaining, “Initially, our approach is to cover the needs of an insurance company. We want to add insurance company management solutions to our software package to comprehensively meet these needs. Another focus is to create a platform that can grow and develop the digital insurance industry, requiring very strong and complete platforms. Therefore, our initial focus is on platform development.”
Regarding the overlap of Rheyton’s activities with Pasargad Insurance in the fields of IT and innovation, Farzan says, “Just as there was no overlap in Dotin’s banking activities with Pasargad Bank, the same applies to our work with Pasargad Insurance. The IT areas of Pasargad Insurance and Riton are designed to complement each other, following a macro-level design. This is a model that has been implemented in many conglomerates in recent years. Similarly, in innovation, there should not be logical restrictions, and each organization can and should be active in this area. Just as Pasargad Bank has relied on Fanap and Dotin for decision-making and strategic planning, the same approach applies to Pasargad Insurance.”
Riton’s Audience Beyond Pasargad Ecosystem
Farzan asserts that Riton’s audience is not limited to the Pasargad ecosystem, stating, “We are not limited to the Pasargad ecosystem. Besides Pasargad Insurance, Hekmat and Baran Insurance fully utilize our centralized insurance system. In Core 2, we are currently focusing on producing and designing the product, and after implementing Pasargad Insurance’s requirements, we will definitely target market penetration in other areas. Our goal is to incorporate the needs of the entire industry into the design and execution of Core 2 and have allocated resources for this purpose.”
Farzan views innovation at Rheyton from multiple perspectives, saying, “First, in insurance products and services, such as new lines or specific capabilities in existing lines. Second, in how insurance services are offered and made accessible. Third, in technological advancements and up-to-date technology. The fourth aspect involves utilizing innovations from other industries that have yet to be introduced in insurance. I am hopeful that the company’s specialized human resources and Riton’s structure will significantly contribute to these innovations.”
Farzan highlights artificial intelligence as one of the most complex and crucial modern technologies, stating, “The use of AI and data management will significantly advance the insurance industry, making processes more applicable and precise. For instance, in issuance and claims, as seen globally, the use of AI and data mining can be highly impactful in both actuarial and claims processes.”
Challenges and Future Directions
Farzan identifies the challenges in advancing this path as tied to technological development and digital transformation, saying, “Although the insurance industry in Iran has not accelerated as rapidly as the banking sector, this situation presents both a threat and an opportunity. If changes are made, the outcomes will be much more significant. Riton’s mission is to bring about a serious transformation in the insurance industry.”
Monopoly Benefits No One
Farzan considers Riton’s key future plans to involve financial inclusivity and digital transformation, adding, “We are concentrating our efforts in two areas: expanding and developing insurance products and services, and increasing final customer access to these products and services. In the second aspect, we aim to broaden public accessibility to the insurance industry.”
Regarding differences between the insurance and banking industries at Dotin, Farzan says, “In banks, IT development has been seen as an investment. Current statistics show that insurance penetration in Iran is 1.8% compared to 6.8% globally. The market volume is about 200 trillion IRR, but the IT sector within insurance accounts for roughly 1 trillion IRR, or 0.5% of the industry’s market. Digital sales in the Iranian insurance industry are about 2.5%, primarily in third-party insurance, with other types not yet well recognized. Thus, the business model in insurance needs to change, and investment in this sector must increase, although there has been a positive and hopeful trend in recent years.”
Farzan concludes, “Monopoly benefits no one as it leads to stagnation and underdevelopment. Instead of competing for a small share, we should focus on making the entire cake larger so that all players in the sector can gain a substantial share in the digital economy.”
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