EghtesadOnline: The contract signed by Saman Insurance Company with Munich Re last year is still binding, despite new developments in the wake of the US pullout from the Iran nuclear deal, the company’s CEO announced.
Ahmad Reza Zarrabieh added that since last year, employees of Saman Insurance Company have been dispatched to Munich, Germany, to take part in training courses and bilateral cooperation in reinsurance and educational fields.
Asked if Munich Re will leave the Iranian market because of looming sanctions, the CEO said, “No such news has been announced officially [by the company] yet.”
Last year, Saman Insurance Company signed a contract with the world’s largest reinsurance company Munich Re, according to Financial Tribune.
“Based on the contract, risks in life insurance and capital formation categories are reinsured by Munich Re,” Zarrabieh had announced at the time.
The German firm at the time became the first foreign reinsurer to start working with Iran after the lifting of international sanctions in January 2016.
The company had previously halted business activities in Iran in 2010, stopping reinsurance for ships carrying Iranian oil exports on July 1, 2012.
The privately-owned Saman Insurance Company, a subsidiary of Saman Bank, accounts for 6% of Iran’s life insurance market. Life insurance accounted for 42% of Saman’s portfolio in the fiscal 2016-17.
Asked if Munich Re would be replaced with Indian and Chinese firms in Iran’s reinsurance market, Zarrabieh said, “During previous sanctions, we had the experience of working with East Asian insurers and if, with the imposition of sanctions, we face restrictions in extending our reinsurance coverage to big firms, then we have enough experience in this regard.”
“During previous sanctions in 2011-12 and in order to solve the problem of big insurance coverage, the Insurance Consortium and Guarantee Fund were established in Bimeh Markazi and this capacity still exists,” he added.
Bimeh Markazi or the Central Insurance of Iran is the industry’s sole regulator and its biggest insurer.
Rebuffing appeals from France, Germany and Britain, US President Donald Trump withdrew the United States from the 2015 nuclear deal between Iran and six major powers designed to put curbs on Iran’s nuclear program in exchange for sanctions.
Some of the US sanctions against Iran will take effect after a 90-day “wind-down” period ending Aug. 6, and the rest, most notably on the petroleum sector, after a 180-day “wind-down” period ending Nov. 4.
The move has spurred global insurers and other companies to rethink their dealings in Iran, as they await further guidance from the United States and European Union.
Insurance broker Arthur J. Gallagher & Co. said in May it will continue to monitor developments following the US withdrawal from the Iran deal, while Zurich-based Swiss Re said it is “assessing the impact” of the US decision on its business.
Arthur J. Gallagher, based in Rolling Meadows, Illinois, has British and Norwegian subsidiaries that have brokered insurance and advised clients on activities related to Iran’s oil and gas industry, as recently as the 2018 first quarter, according to a filing.
Also in May, German insurer Allianz said it was preparing to wind down Iran-related business due to possible US sanctions.
“We are analyzing our portfolio to identify Iran-related business,” an Allianz spokesman told Reuters at the time.
Allianz is also “waiting for and will consider any guidance that the EU and the German government may provide”, he added.
“This analysis is ongoing and we are developing wind down plans for relevant business to ensure appropriate termination within the defined periods,” the spokesman said.
A Lloyd’s of London spokesman, on May 10, said the company is also reviewing the implication of “reimposition of previously suspended US sanctions against Iran and will issue guidance to the Lloyd’s market in due course”.