According to a report, the marine re/insurer International Group of P&I Clubs has avoided the use of U.S. domiciled reinsurance in its 2017 program, which enables it to cover Iranian exports such as oil.
Reuters reported this morning that the global shipping insurance and reinsurance market has come up with a way to enable it to provide capacity to provide almost full coverage for Iranian exports from next month.
The problem has been that with U.S. domiciled reinsurers providing capacity to back the reinsurance programs of most marine insurers, sanctions have meant that Iranian shipping and exports have not been able to be covered fully.
The resolution has been to exclude U.S. domiciled reinsurance companies from the International Group’s January 2017 renewal, meaning that it can leverage the full extent of its reinsurance program to provide coverage to Iranian exports and shipping.
“There will be no U.S.-domiciled reinsurer participation on the 2017 IG reinsurance program,” Andrew Bardot, Executive Officer of the International Group of P&I Clubs reportedly told Reuters in an email.
“This will substantially address the potential shortfall in reinsurance recoveries in the event of Iranian-related claims,” he continued.
Reuters reports that the arrangements will take effect on February 20th 2017, after which shipping that operates in connection with Iran will have a greater chance of securing more insurance coverage.
Of course, taking U.S. domiciled reinsurers out of the equation will not have been difficult, given the reinsurance markets of Bermuda, London and Zurich could have provided the needed capacity on their own.