Update: Munich Re Signs 1st Post-Sanctions Deal With Iran

Iran's Saman Insurance Company has signed a contract with the world's largest reinsurance company Munich Re, the CEO of Saman Insurance said on Wednesday.

“Based on the contract, risks in life insurance and capital formation categories are reinsured by Munich Re,” Ahmadreza Zarrabieh also told a press conference, IBENA reported.

Update: Munich Re confirmed that it has started working with Saman Insurance Company, in an email to Financial Tribune on Friday. 

The German firm has become the first foreign reinsurer to start working with Iran after the lifting of international sanctions in January 2016.

The company halted business activities in Iran in 2010, stopping reinsurance for ships carrying Iranian oil exports on July 1, 2012. 

The decision was expected to impact reinsurer’s premium volume of around €10 million in Iran. 

The Central Insurance of Iran had announced that the German firm has given a significant offer for covering a variety of risk in Iran’s post-sanctions insurance market.

“Saman has become the first Iranian insurance company to purchase life reinsurance coverage from a foreign firm,” Zarrabieh said, noting that risks up to €1 million are covered by the German reinsurer.

The privately-owned Saman Insurance, a subsidiary of Saman Bank, accounts for 6% of Iran’s life insurance market. Life insurance accounted for 42% of Saman’s portfolio in the previous Iranian year (March 2016-17).

Update:

Saman has recently received the permission for increasing its capital from 803 billion rials ($21 million) to 1,500 billion rials ($39.8 million).

The insurer also announced that Saman and Munich Re are working to develop a new model for auto insurance policies, in which the drivers’ behavior would be used as the criteria for calculating the premium. 

“We have received CII’s permission for offering the new model of auto insurance,” Zarrabieh said, noting that the new policies would be available in the second half of the current Iranian year. 

The mileage and locations where the vehicle is mostly used would be among the criterion used for calculating premiums. 

So far, all insurance companies had to sell auto insurance policies annually in accord with CII’s cap for premiums. 

Personal auto policies account for the largest portion of Iranian insurers’ income. During the previous Iranian year (March 2016-17), insurers earned 109.4 trillion rials ($2.9 billion) by selling 20.2 million policies in this category. 

However, PAPs constitute the lion’s share of losses, which adds up to more than 78 trillion rials ($2.08 billion), accounting for 43.4% of the total sum.