Iran’s Saman Insurance has become the first Iranian insurer to purchase life reinsurance from a foreign firm following the removal of international sanctions in 2016, after signing a deal with Munich Re to reinsure risks in life insurance and capital formation categories, the Financial Tribune reported.
Ahmadreza Zarrabieh, Chief Executive Officer (CEO) of Saman Insurance said risks of up to €1 million (US$1.2bn) are covered by Munich Re under the agreement.
Life insurance accounted for 42% of Saman’s total portfolio in the previous Iranian fiscal year (March 2016-17).
Munich Re had to put a stop to its Iranian business activities in 2010, but has now become the first foreign reinsurer to recommence working with Iranian firms since the international sanctions were lifted in January 2016.
UN sanctions on Iran were lifted on January 16th last year after the UN Security Council’s five permanent members and Iran reached a provisional agreement on a framework that would life most sanctions in exchange for limits on Iran’s nuclear programmes extending for at least ten years.
Since the easing of sanctions reopened the country to international trade, negotiations between Iranian and global reinsurers and insurers have moved at a fast pace.
Last year Lloyd’s and broking firm Ed were among the troupe of reinsurers seeking opportunities to renew lines of business, and in March this year SCOR met the High Council of Insurance of Bimeh Markazi Iran Central Insurance, to negotiate potential for collaboration.
Rating agency A.M. Best said Iran’s gross written premiums were at $7.5 billion in 2014, making Iran one of the biggest markets in the region.
However, Secretary of State Rex Tillerson wrote that “Iran remains a leading state sponsor of terror, through many platforms and methods,” and in April the Donald Trump administration ordered a review of the lifting of the sanctions despite Iranian compliance with the relief agreement.
This has brought increased geopolitical risk to the newly opened market space, and global reinsurers have been wise to demonstrate caution as they move into the region.