Global reinsurance player Munich Re has entered into an agreement with Iranian insurer Mellat Insurance Company, which will see the German reinsurer covering the entire life insurance portfolio of Mellat.
Mellat said that it has covered all of the issued life insurance policies under the agreement with Munich Re, as part of its mission to enhance its financial strength and protect its policyholders.
The Iranian insurer, which is aligned with the country’s Bank Mellat, has also entered into reinsurance agreements in the past with international reinsurers as a way to reduce its risks and boost its financial standing.
For smaller insurers operating in emerging economies it is vital to have access to reinsurance capacity, in order to offset the risks they are assuming and maintain solvency strength.
The Iranian insurance market has only opened up to international reinsurers in recent years and Mellat has taken advantage of this, entering into an excess of loss reinsurance agreement with SCOR last year.
Iran’s Saman Insurance became the first insurer in the country to purchase life reinsurance from a foreign player after the removal of international sanctions in 2016, signing a deal with Munich Re in 2017.