Global insurers are taking stock of how the US withdrawal from the international agreement to curb Tehran's nuclear program and renewed sanctions against companies that do business with Iran could affect them.
Insurance broker Arthur J. Gallagher & Co. said on Friday it will continue to monitor developments following the US withdrawal from the Iran deal, while Zurich-based Swiss Re said it is “assessing the impact” of the US decision on its business.
Gallagher, based in Rolling Meadows, Illinois, has British and Norwegian subsidiaries that have brokered insurance and advised clients on activities related to Iran’s oil and gas industry, as recently as the 2018 first quarter, according to a filing, Reuters reported.
Rebuffing appeals from France, Germany and Britain, US President Donald Trump withdrew the United States 10 days ago from the 2015 nuclear deal between Iran and six major powers.
The move has spurred global insurers and other companies to rethink their dealings in Iran, as they await further guidance from the United States and European Union.
AJG subsidiaries have helped clients obtain insurance and reinsurance for a variety of activities in Iran. They include transporting oil and gas to and from Iran and operating vessels that provide support to offshore oil platforms that supply Iran with oil, according to the filing.
“Whatever the decision from the US administration, we will take appropriate action in compliance with all applicable laws as is our customary practice,” an AJG spokeswoman said.
On Tuesday, German insurer Allianz said it was preparing to wind down Iran-related business due to possible US sanctions.
“We are analyzing our portfolio to identify Iran-related business,” an Allianz spokesman said in an emailed statement, calling it “totally minimal”.
Allianz is also “waiting for and will consider any guidance that the EU and the German government may provide”, he added.
“This analysis is ongoing and we are developing wind down plans for relevant business to ensure appropriate termination within the defined periods,” the spokesman said.
A Lloyd’s of London spokesman, on May 10, said the company is also reviewing the implication of “reimposition of previously suspended US sanctions against Iran and will issue guidance to the Lloyd’s market in due course”.
Germany’s No. 2 lender DZ Bank also said on Friday it will suspend financial transactions with Iran in July following US President Donald Trump’s pullout from the nuclear deal.
“We will completely suspend our foreign payment transactions related to Iran starting July 1st,” said a spokesman for Frankfurt-based DZ Bank, which is the umbrella organization of German cooperative bank chain Raiffeisen-Volksbanken.
EU Protection
However, Germany’s export credit insurer Euler Hermes AG said on Friday it has guaranteed exports to Iran worth €200 million ($235.46 million) since 2016. The program remains in place for now and companies can still apply for guarantees, Hermes said.
European powers have vowed to keep the 2015 nuclear deal alive without the United States by trying to keep Iran’s oil and investment flowing, but have admitted they would struggle to provide the guarantees Tehran seeks.
The European Commission is proposing that EU governments make direct money transfers to Iran’s central bank to avoid US penalties, an EU official said, in what would be the most forthright challenge to Washington’s newly reimposed sanctions.
The step, which would seek to bypass the US financial system, would allow European companies to repay Iran for oil exports and repatriate Iranian funds in Europe, a senior EU official said, although the details were still to be worked out.
The European Union, once Iran’s biggest oil importer, is determined to save the nuclear accord, that US President Donald Trump abandoned on May 8, by keeping money flowing to Tehran as long as the Islamic Republic complies with the 2015 deal .
“Commission President Jean-Claude Juncker has proposed this to member states. We now need to work out how we can facilitate oil payments and repatriate Iranian funds in the European Union to Iran’s central bank,” said the EU official who is directly involved in the discussions.
The US Treasury announced on Tuesday more sanctions on officials of the Central Bank of Iran, including Governor Valiollah Seif. But the EU official said the bloc believes that does not sanction the central bank itself.
European Energy Commissioner Miguel Arias Canete is currently in Tehran and expected to discuss the idea with Iranian officials. Then it will be up to EU governments to take a final decision.
EU leaders in Sofia, Bulgaria, this week committed to uphold Europe’s side of the 2015 nuclear deal.
Other measures included renewing a sanctions-blocking measure to protect European businesses in Iran.
