Lloyd's of London Eying Iran Insurance Opportunities

Lloyd's of London, the British insurance firm, is to send international insurance marketing experts to Iran, to study potentials in the country's free trade zones, said the company’s chief executive, Inga Beale on Friday.

In a meeting with Abdolnasser Hemmati, president of the Central Insurance company of Iran (Bimeh Markazi) in London, the two sides explored grounds for mutual cooperation.   

 “Lloyd’s syndicates are interested in collaborating with Iran; however, banking relations need to be fully established in order to start collaboration in the insurance sector,” Beale said as quoted by the CII website.  

Despite the removal of international banking restrictions in January, Tehran has secured ties with only a limited number of smaller banks as residual US sanctions remain in force.

Shut out of international financial markets for years, Iran is still trying to reap the benefits of last year's nuclear deal with world powers.

By contrast however, Iran is in more active talks with insurers to provide cover in a market valued at $9 billion overall last year and potentially double that in the next decade.

Western companies need insurance in order to resume business with Iran. Shipping and trade credit insurance, which remove the risk of non-payment for goods, are the first types of insurance being offered.

Hemmati has travelled to the UK and Germany to hold talks with major insurance and reinsurance firms. He had said earlier that he seeks to attract foreign investment to the sector.

During the meeting with the CEO of the top British insurer, Hemmati referred to foreign insurers’ presence in Iran's market before the sanctions started to bite, especially in the aviation sector. “Lloyd’s is of high importance to Iran when it comes to reinsurance and coverage of major risks.”

He called on the insurer to form a special committee to prepare the ground for operation of Lloyd’s syndicates in Iran’s free trade zones. "Iran has substantial plans for promoting its economy, namely the insurance sector," he said.

As per law, foreigners are allowed to establish or fully own insurance companies in FTZs, whereas in the mainland they can approximately own 40% of insurance companies’ shares.

So far China has expressed interest in launching an insurance company in Qeshm Island Free Trade Zone in the Persian Gulf. Major insurance companies from Japan are also said to be keen on investing in Iran's insurance sector. They are reportedly studying the market at the moment.

So far only six Iranian insurance firms are allowed to operate in the FTZs. The overall premium income of the companies reached two trillion rials ($63.3 million) during the first half of the fiscal year that ended in September, indicating a whopping 81.1% growth year-on-year.

SCOR, UIB Ties

The insurance regulator chief also met with Victor Peignet, chief executive of the French insurer SCOR in London on Friday. “SCOR was a leading reinsurer covering major risks for Iran, including risks in petroleum and petrochemical industries,” Hemmati said.

He urged action on solving the issues regarding the sanctions clauses in insurance contracts, emphasizing that Iran will not accept any conditions beyond the nuclear deal with the six world powers.

Peignet said his company is willing to start collaboration with Iran, in line with comments by the Paris government to partner with Tehran in key industries.

“We are ready to start collaboration, as the leader reinsurer, in accordance with the CII framework,” he said and added that SCOR is ready to hold training courses for Iranian insurance managers over risk management and pricing policies.

Hemmati also held talks with Munir Kabban, president of UIB Group, an international insurance and reinsurance company headquartered in London. He acknowledged the firm's efforts in training Iranian insurance experts.

Many European insurance and reinsurance firms are planning to enter the Iranian market following the lifting of the sanctions in January.