EghtesadOnline: Mellat Insurance Company, affiliated with Bank Mellat, has signed a contract with Munich Re, the biggest reinsurance company in the world, based on which the German firm will cover the entire life insurance portfolio of the private Iranian insurer.
“In line with maintaining its financial solvency and offering better services to the insured, Mellat Insurance has signed valuable contracts with reinsurers on the international scale. In continuation with these deals and after years of negotiations, Mellat Insurance has succeeded in signing another reinsurance contract with foreign reinsurers,” reads a statement on the insurer’s official website.
The previous contract alluded to by the statement was reached in October 2017 with SCOR, the France domiciled reinsurer that agreed to provide Mellat with loss reinsurance protection up to a maximum of €200 million.
Munich Re had become the first foreign reinsurer to start working with Iran after the lifting of multilateral sanctions in January 2016 when it signed a contract with Saman Insurance Company to cover risks in life insurance and capital formation categories in July 2017, according to Financial Tribune.
Mellat Insurance was licensed by the Central Insurance of Iran four years ago as the first private insurance company. According to its statement, it now boasts the highest financial solvency ratio among Iranian insurers with an overall capital of 2.85 trillion rials ($67.85 million).
“Mellat experienced a 53% rise in the sale of life insurance policies during the previous fiscal year, which now take up a 12.8% share of its portfolio,” Mohsen Qarekhani, director of reinsurance at Mellat, told Risknews.
“Considering the long-term commitments of life insurance and the rising trajectory of this category in Mellat, divesting a portion of the company’s portfolio to foreign markets seemed necessary to maintain the highest level of financial solvency,” he added.
Mellat’s contract marks another step by Iran’s insurance industry for expanding international ties, indicating that its potentials remained untapped because of threats posed to the nuclear deal by US President Donald Trump who is expected to take another sanctions waiver decision concerning the landmark deal on May 12.