BAGHDAD, Iraq—Iraq's roads are filled with maniacs, and those are just the drivers, who seem to exercise caution only when they happen to be heading the wrong way down a one-way street. The murder rate is astronomical. Half the country smokes like fiends.
Is this a great place to sell insurance, or what?
Of course not. But Iraq's three government-owned insurance companies are doing it anyway, having resumed operations last year after rebuilding their looted offices. And foreign insurers are circling the market, awaiting a new insurance law and a calmer environment before plunging into what they think could be a lucrative business.
It's one more small example of how, despite the awful security situation and the dashed hopes over jobs, basic services and reconstruction, Iraqis are grasping at normalcy.
"Iraq's economy is one of the best for insurance," said Tarik Khalil Ibrahim, the chairman and general manager of the National Insurance Co., with some hyperbole.
The company, affiliated with Iraq's Finance Ministry, occupies several floors of a high-rise building in a somewhat sketchy Baghdad neighborhood.
Like nearly every other government-related facility, Iraq's largest insurer was stripped nearly bare by looters after the U.S. invasion. It dipped into its assets to refurbish its offices. Nearly all the prewar employees are back to work, Ibrahim said.
Iraq these days is one of the riskiest places on the planet. The insurance companies handle that by refusing to compensate for damage that occurred during last year's invasion, and by not covering anything that would be considered an act of terrorism or war, as do most insurance policies anywhere.
For example, if an Iraqi with a life insurance policy is shot and killed during a robbery, he's covered. But death by car bomb is excluded, company officials say.
With kidnapping for ransom a thriving business in Iraq, the company so far has avoided offering kidnapping insurance. The premiums would be unaffordable for Iraqis, Ibrahim said.
He declined to disclose specific figures, but he said the company has tens of thousands of policyholders and reserves of around $8 million, both tiny amounts in a country of 26 million people. As was the case with many modern institutions in Iraq, the insurance companies catered mainly to the wealthier Sunni Muslim elite, which had run the country since Ottoman times.
Founded in 1952, the company offers life, health, fire, accident, property and auto insurance, among others. It's supposed to cover all Iraqi drivers for injuries under a blanket program paid for by a fuel surcharge. Officials admit that many people are unaware of that coverage, and therefore fail to submit claims after accidents.
When Iraq came under international sanctions after the 1991 Persian Gulf War, European reinsurance companies cut ties with the company, Ibrahim said, leaving it without a financial safety net. That, plus the collapse of Iraq's economy and an explosion of fraudulent claims, led officials to cap payouts on certain policies, he said.
Others tell a darker story, alleging that Iraq's insurers stiffed policyholders while employees demanded bribes for even partial payouts.
"My father was a big believer in insurance," said Walid K. Issa Taha, who runs a Baghdad-based contracting company and employment agency. "He used to show us the certificates. And then he found out it was toilet paper. They never paid. They demanded bribes."
Ibrahim said: "I don't deny there were bribes in government because of the low salaries, but I challenge anyone who says he paid a bribe to one of my employees."
In any event, Ibrahim said, the company has signed agreements with international reinsurance companies and is now paying in full on its policies.
That assertion was impossible to verify, but one happy customer is Dr. Adil Hussein Jassim, a dentist, who said he bought a fire, accident and theft policy for his office in 1992.
Several months ago, thieves broke in and cleaned him out. The company paid the equivalent of $2,000, which he said covered about 70 percent of his replacement costs.
"Without their help I wouldn't have been able to continue in business," Jassim said.
While the National Insurance Co. offers an example of postwar revival, it also tells a story of what's holding Iraq's economy back. Although business is way down since the war, there's no talk of laying off any of the 800 employees whose generous salaries are paid out of Iraq's oil revenues. About 400 of them work at the home office, where many could be seen sipping tea or chatting during several recent visits.
Bloated payrolls are a fixture of Iraq's state-owned companies, which together are second only to the government ministries as the country's biggest employer. The U.S.-led occupation originally planned a massive privatization of the state-owned sector, but backed off when Iraqi politicians balked.
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(c) 2004, Knight Ridder/Tribune Information Services.
PHOTO (from KRT Photo Service, 202-383-6099): usiraq+insure
Iraq