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Iran Sanctions Weighs on UK Insurance Market.

The sanctions regime, due to take effect in July, bans imports of Iranian oil into the EU and prohibits European insurers from indemnifying ships carrying Iranian oil anywhere in the world.

That will clear the way for rivals in Iran, Asia or Russia to pick up the slack, said Andrew Bardot, executive officer of the International Group of P&I Clubs, an association of customer-owned ship insurers which covers 95 percent of the world's tankers against pollution and personal injury claims.

"It doesn't stop ship-owners who wish to engage in that trade from getting insurance elsewhere," Bardot said. "At the commercial level, there will be a loss of premium from those fleets, and a lot of migration to other markets."

"Any situation like this could result in business moving to other areas," said Neil Roberts, a senior executive at the Lloyd's Market Association, which represents underwriters operating in the Lloyd's of London insurance market.

London is the leading global centre for marine insurance, accounting for 17 percent of the $8.5 billion market for hull and machinery cover, which protects vessels against physical damage, according to the International Union of Marine Insurers (IUMI).

It also controls an 8 percent share of the $13 billion market for cargo insurance, in third place behind Germany with 9 percent and Japan with 14.6 percent.

Since the United States is planning similar sanctions, insurance business displaced from London and other European markets is likely to end up on the books of insurers in Asia, Latin America or Russia, executives said.

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Publication:Moj News Agency (Tehran, Iran)
Geographic Code:4EUUK
Date:Feb 1, 2012
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