Jonathan Andrews, Director & Head of Eastern Underwriting in Steamship Mutual, said a considerable number of Iranian vessels have taken out insurance form our company and “we are pleased to observe return of Iranian directors to the board of one of the largest and most diverse P&I Clubs in the world.”

Prior to imposition of sanctions against Iran in 2009, Steamship Mutual, as a leading provider of Protection & Indemnity (P&I) insurance, was the main and most favorable insurer of Iran’s shipping fleet.

IRISL has purchased insurance from Steamship Mutual for container ships and multi-purpose vessels though vessels active in the field of international trade will receive top priority.

Earlier in August, during a visit to Tehran of a Norwegian delegation, a Memorandum of Understanding was inked between Iranian Shipping Lines (IRISL) and the Skuld Marine SKULD P&I Club for shipping insurance cooperation.

By virtue of this MoU, different cooperation grounds between the Islamic Republic of Iran Shipping Lines (IRISL) and the Norwegian SKULD P&I Club including providing different types of maritime insurances, considering and pursuing complaints regarding maritime insurances coverage, training personnel and promoting the knowledge and competency of the Iranian experts were discussed and the respective mutually agreed issues were signed by both parties.

IRISL was the first Iranian shipping line to be affected by Western and European sanctions. Presently, IRISL and the National Iranian Tanker Company (NITC) have resume cooperation with Steamship Mutual international club in a bid to revive previous relations.

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The Lloyd’s of London insurance market says it is negotiating with to open branches in the country’s free trade zones.

Inga Beale, the CEO of the world’s leading specialty insurer, was quoted by Iran’s domestic media as saying that Lloyd’s of London would establish branches in Iran’s free trade zones.

To the same effect, two Lloyd’s directors will soon travel to Tehran to discuss the technicalities for this, Beale was quoted as saying by Iran’s state news agency IRNA. She made the remarks in a meeting with Abdolnasser Hemmati, the head of Iran’s Central Insurance Company, during a visit to London on Friday.

Beale further added that Lloyd’s syndicates are interested in returning to the Iranian market. She further stressed that it is important for Iran to remove the problems that obstruct the transfer of money in the insurance industry.

Hemmati, for his part, said the presence of insurance giants like Lloyd’s in Iran is important for the country.

Following the removal of sanctions against Iran in January, indications appeared to show that global insurers were looking into the prospects of penetrating into a market whose worth is estimated to be around $7.4 billion in premiums.

According, European majors including Allianz, Zurich Insurance, Hannover Re and RSA were the first to announce that they would evaluate potential opportunities in the country specifically in its marine, aviation, power generation and energy sectors.

Nevertheless, the only companies that have already taken steps to create a foothold in Iran’s insurance industry have been Germany’s Hermes, Italy’s SACE, and France’s Coface. They have all recently signed agreements to guarantee a certain trade activity with the Islamic Republic, Reuters in October.

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The Export Guarantee Fund of Iran (EGFI) signed the agreements in Lisbon on the sidelines of the annual meeting of Bern Union — an association of private and state export credit insurers from around the world, IRNA reported Wednesday.

Under the agreement, the Iranian and European sides will cooperate on “exchange of economic, trade and banking information, reinsurance coverage, coinsurance, and training”.

IRNA quoted EGFI Managing Director Kamal Seyyed-Ali as saying that European export credit insurers were increasingly interested in financing projects after the lifting of sanctions on Iran.

“Given our good track record in repayment of finance installments and Iran’s foreign exchange reserves and the nonexistence of outstanding debts, these institutions are interested in the Iranian financing market despite the problems created by the US Treasury,” he said.

Banks and financial institutions are holding back on moving into Iran because they are fearful of falling foul of American sanctions against the Islamic Republic.

Iran paid off its debt of about €500 million to Hermes

Iran paid off its debt of about €500 million to Hermes, Iranian Ambassador in Berlin Ali Majedi said in June, clearing the way for the resumption of insurance services.

Hermes, which extends insurance coverage to Iranian exports, has been encouraging German banks to normalize ties with Iran.

Last month, the Central Bank of the Islamic Republic of Iran (CBI) said Austrian export credit agency OeKB had raised its cover for Iran transactions to one billion euros.

Raiffeisen Bank and Erste Bank from Austria along with banks from Italy, Switzerland, Germany, Turkey and Belgium have set up shop in Iran, handling transactions with the energy-rich country while major banks have stayed away.

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Iran is now 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. The country trying to reap the benefits of last year’s nuclear deal with world powers, Reuters wrote on Friday.

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

“There is generally a lower degree of fear and apprehension and that is because you have not had the big fines on the insurers that the banks have faced,” said leading London sanctions lawyer Nigel Kushner.

“We are going to see greater and quicker movement there than on the banking side, at least in London and the UK,” said Kushner, who is also a director of the British Iranian Chamber of Commerce.

As Iran has aimed to ramp up oil exports, securing marine insurance has been crucial. Top tier Western ship insurers have started offering services in recent months.

Insurances for Iranian tankers

Iran’s Deputy Oil Minister Amir Hossein Zamaninia has said European insurers now have no problems insuring Iranian oil tankers.

Protection and Indemnity (P&I) clubs – marine insurers owned by shipping firms – have started to provide cover for Iran’s shipping fleet, including its oil tankers.

Jonathan Andrews, director and head of eastern underwriting with Britain’s Steamship Mutual, said it was insuring ships for Iranian tanker operator NITC and also for Iranian cargo ship operator IRISL.

“We have a long history of insuring Iranian ship owners,” Andrews told Reuters. “We are happy to be insuring our former members again.”

Norwegian ship insurer Skuld said it was in discussions with IRISL, while it was already insuring NITC ships.

Others such as the UK’s Standard Club said they were covering vessels trading to and from Iran, but did not say whether this related to Iranian shipping firms.

Ship insurers say there are still constraints on payments, given a freeze on using the US financial system.

“Problems remain however in relation to the channeling of payments through the banking systems, both in relation to collection of premium and settlement of claims,” said Andrew Bardot, executive officer with the International Group, which represents ship insurers.

This was due to the reluctance of many banks and financial institutions to process such payments, and was now the main concern for insurers and reinsurers, he said.

“Solutions are being found, but it is a difficult process and likely to remain so for the foreseeable future.”

More transactions

US banks are forbidden to do business with Iran under domestic sanctions still in force. European banks also face problems, since transactions with Iran in dollars cannot be processed through the US financial system.

Banks remain nervous after some heavy US penalties, including a $9 billion fine on France’s BNP Paribas (BNPP.PA) in 2014, largely for violating US financial sanctions.

Despite this, European export credit agencies are guaranteeing trade finance for Western companies doing business with Iran.

Germany’s state-run export credit group Hermes has concluded trade finance deals covering goods worth several million euros.

“About a dozen transactions have been approved so far,” a Hermes spokesman said.

“The demand is there from the exporters’ side but they need a lot of information. There is a continuous and rising flow of applications (for export credit guarantees).”

Italian export credit agency SACE has also undertaken its first small transactions with Iran.

“The lingering risks should not be underestimated, however, as they might create problems … legal, documentary, operational, for companies interested in building or restoring commercial or financial relationships with local counterparties,” a SACE spokesman said.

France’s Coface has signed an agreement with Iran to guarantee trade finance on behalf of the French government.

France’s Coface has signed an agreement with Iran to guarantee trade finance on behalf of the French government. Nevertheless, major transactions were yet to be concluded due to the banking issues.

Aviation and energy are two sectors in focus, industry executives say, along with political risk cover, even if there have been few deals so far.

Christian Bieri, EMEA reinsurance head at insurance group MS Amlin, said Iran was “very much under discussion”.

“It’s very high up the agenda,” Bieri said. “It’s going to be something for 2017.”

Other large insurers and reinsurers such as Hannover Re (HNRGn.DE) are looking closely at Iran, but say concerns about payments still prevent them from doing business there.

Swiss Re (SRENH.S) chief executive Christian Mumenthaler told Reuters: “We have big business in the US and so our chief legal officer is basically regulating every micro-step we do in that direction.”

Lloyd’s of London had historically been active in Iran and chairman John Nelson said it was a “market we would like to get back into”.

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