Insurance giant American International Group (AIG) has said that it is winding down all underwriting activities in Iran, that was undertaken by Validus and AIG entities, due to the imposition of U.S. sanctions against the country.
AIG acquired the Validus global insurance and reinsurance business recently and it included some underwriting of specialty lines in Iran.
With Iran now the subject of U.S. sanctions, AIG has disclosed the extent of operations involving writing insurance for Iranian entities and said these are being wound down.
AIG said that some of Validus’ non-U.S. subsidiaries underwrite marine hull, war and cargo policies for shipowners that deliver cargo to and from Iran, including the transport of crude oil from Iran to other countries and the transportation of refined petroleum to Iran.
In addition, AIG said that some of Validus’ non-U.S. subsidiaries also underwrite business that provides excess of loss reinsurance coverage which includes protection for certain other specialty lines risks involving Iran.
U.S. sanctions targeting Iran’s oil, banking and transportation industries were imposed as of Monday 4th November and insurers and reinsurers have been making preparations for this, with the winding down of activities.
AIG’s filing confirms that the company is shuttering all activities involving underwriting that could contravene the sanctions and said that the profit contribution from these activities had been de minimis.