According to a press release published on CII’s website, the agreement was finalized during a meeting between Abdolnasser Hemmati, CII’s president, and Victor Peignet, the CEO of SCOR Global P&C SE, after yearlong negotiations bore fruit.
No more details were provided by CII, but the agreement was hailed by insurance experts as a watershed event for developing Iran’s reinsurance business and opening the country’s lucrative insurance market to foreigners.
SCOR SE became the world’s fourth-largest reinsurer in 2015, with gross written premiums worth €13.4 billion, Financial Tribune reported.
Hemmati expressed his enthusiasm for the agreement hours after the announcement was made, describing it in a tweet as an “important step toward the implementation of JCPOA in the insurance industry” referring to Iran’s 2015 nuclear deal reached with world powers by its initials.
Denis Kessler, the chairman of the Board of Directors and CEO of SCOR SE, also said the agreement marked the beginning of a new era of cooperation between SCOR and Iran, and called for enhancement of ties in other categories as well.
CII had announced earlier that it has held talks with more than 140 foreign insurance and reinsurance companies seeking to enter the Iranian market since the lifting of sanctions in January 2016.
Earlier in July, Munich Re, the world’s largest reinsurance company signed a contract with Iran’s Saman Insurance Company, becoming the first foreign reinsurer to start working with Iran in the post-sanctions era.
Sara Haghighivand, a member of Professional Committee of High Council of Insurance, told Financial Tribune that CII has been taking a cautious line in its negotiations with foreigners, mainly to protect the industry from any external problems in the future.
“That’s why it took nearly two years for the agreement [with SCOR] to become finalized,” she said.
During the sanctions era, all potential risks had to be covered by domestic entities and if an incident took place, the government-backed reinsurance fund and local insurers had to bear the costs–an inevitable scenario due to limitations imposed by sanctions.
“Currently, the Central Insurance of Iran, Iranian Re and Amin Re are the only players in Iran reinsurance market,” she said, noting that CII is the biggest of the three.
“It’s important to transfer more risks to credible foreign reinsurers, since more risk is distributed across a broader geographical area.”
According to Haghighivand, working with major global players will have the benefit of encouraging other foreign reinsurers to enter the Iranian market, especially when profit margins are dropping elsewhere in the world.