UAE: Insurance sector to be key beneficiary of sanction-free Iran
Source: Middle East Insurance Review | May 2015
The UAE’s insurance sector is among the key beneficiaries of the lifting of international sanctions against Iran, if the Iranian government meets its commitments on the country’s nuclear programme under an agreement due to be signed with major powers at the end of June, said media reports.
Mr Massimo Falcioni, CEO for the Middle East territory at credit insurer Coface, told Gulf News: “All subterranean movements of goods will be done through formal channels and that’s going to be the biggest game-changer for the trade, logistics and insurance sectors here.
“Parties will have guarantees in place that payments on goods bought and shipped will be honoured. And if there are to be payment issues, local parties will have adequate backup by way of being insured against any risks.”
According to Mr Falcioni, there will be other direct ways the UAE could benefit from a softening in the Iran situation. “Those European businesses which want to have future dealings with Iran are likely to set up base in Dubai,” he said. “And when you add these to future transactions that businesses already based here will do, it will filter through the whole UAE economy.”
Mr Mustafa Vazayil, Managing Director of Gargash Insurance, said that under the current sanctions, risk cover on cargo is provided solely by Iran Insurance Company. “Based on how much of the Iranian market will be opened up to foreign direct investment, it is possible to see some of the multinational insurers in the UAE who were operating in Iran before the Revolution returning to Iran,” he said.
He added: “As everyone rushes for a slice of the pie, we will see competitive pricing being offered. This will get rectified only when claims start pouring in and insurers encounter challenges in managing claims in Iran.”