European insurers, reinsurers, brokers and shipping firms have been winding down Iranian business as the United States re-imposes sanctions on insurance and reinsurance from 4 November 2018.
Lloyd’s of London fears that fresh US sanctions on Iran are likely to prevent the use of its IT platform for any Iran insurance, adding to difficulties for European insurers providing cover for the country, reported Reuters.
Lloyd’s of London and other European insurers provided marine, energy and trade credit cover for Iran after the United States lifted secondary sanctions in January 2016 following a nuclear deal between world powers and Iran reached in 2015.
This was followed by lifting of sanctions which meant European firms could trade with Iran without being penalised by the United States.
The lifting of sanctions also allowed foreign subsidiaries of US firms to trade with Iran.
Last month, the US Treasury’s Office of Foreign Assets Control (OFAC) revoked licences which had allowed foreign subsidiaries of US firms to trade with Iran.
Looming US sanctions on 4 November, meant insurers may not be able to process Iran-related business through the Lloyd’s platform firm DXC.
DXC provides data processing and other back office services to Lloyd’s and other London insurers through two firms, XIS and XCS, that are jointly owned by DXC’s British subsidiary Xchanging, Lloyd’s and the International Underwriters’ Association.
Lloyd’s insurers and brokers with Iran business included Chaucer, Ed Broking as well as RFIB Group Limited and United Insurance Brokers Holdings.