Iran will be seeking more foreign private capital in reinsurance after the Iranian government announced plans to divest 14% of its shares in Amin Re by March 20th, according to Iran’s Financial Tribune.
Amin Re’s Chief Executive, Mostafa Kiaei, said the Iran Privatization Organization would announce further details in the coming weeks, but stressed foreign investors would be given precedence in shares sales; “we prefer to sell the shares to foreign insurers and entities.”
Kiaei said he hoped to recapitalise the reinsurer by the year-end, “raising Amin Re’s capital from 1.5 trillion rials ($40 million) at present to 2 trillion rials ($52.6 million).”
He added that the government has now required reinsurance firms to raise their capital to at least 4 trillion rials ($103.6 million), and said he was hoping recapitalisation would give Amin Re further international legitimacy; “we want to recapitalize in order to be rated by international firms like AM Best.”
Amin Re has become the first Iranian company to join the International Insurance Society – in another move to welcome increased collaboration with major players in the global insurance and reinsurance market.
Iranian law currently permits foreigners to fully own insurance firms located in free trade zones, but limits foreign shares in insurance firms on the mainland to 40 percent.
But the Central Insurance of Iran is expected to bar general insurers from accepting reinsurance risks from the next fiscal year and Amin Re Chief Executive, Mostafa Kiaei, told the Financial Tribune he believes this would make the company’s shares more attractive to general insurance companies; “Currently, the Central Insurance of Iran and Iran Insurance Company collectively control 90% of the Iranian reinsurance market.
“But the CII is more flexible in its operations as in some cases it has transferred a portion of risks to Amin Re.”
