Moalem Insurance had noticeable achievements in the field of insuring ships’ body and machineries;
nevertheless, it ran into issues in cargo carrying insurance.
Moalem Insurance, initially known as Export Insurance and Investment Company, was established in 1994, with the collaboration of banking system for the purpose of expanding exports and providing credit insurance coverage for the available risks. After the sales of the majority stocks of the company and under the decision of the new shareholders in July 2007, the company was renamed Moalem Insurance.
Given the conditions of the country and the prediction of the problems that shipping lines would potentially encounter, Moalem Insurance was purchased by the Islamic Republic of Iran Shipping Line (IRISL) so that IRISL could utilize its potentials in the insurance industry, and as well, insurance industry could provide coverage for IRISL ships. Moalem Insurance managed to stage a prosperous performance in this regard, and this matter led to the formation of the first insurance P&I in Iran.
Thanks to the P&I insurance coverage by Moalem Insurance at the sanctions’ era, IRISL managed to keep its fleet operational in the international waters. Besides, Moalem Insurance P&I was accepted and approved by Japan India and South East Asian countries.
Even though Moalem Insurance has been established for only 23 years, it has managed to occupy 35 % of Iran’s maritime insurance market. In addition, Moalem Insurance’s entering P&I insurances at the period when Iranian shipping
lines were under sanctions is deemed as a special success both for this company and for Iran’s national fleet. In order to discuss different angles of Moalem Insurance’s activities, the managing director and the head of the board of this firm, Mohammad Ebrahim Tahsiri, sat down in an interview with Payam Darya.
I intend to respond to your question in three phases: IRISL’s position, IRISL’s objectives, and IRISL’s performance. I must first assert that the all the three above mentioned issues have to be introduced and discussed in the realm of IRISL insurance. Therefore, I believe that IRISL’s entering insurance industry via purchasing Moalem Insurance’s shares brought about a special position both for IRISL and for Moalem
Insurance itself. Indeed, IRISL’s entering insurance industry involved significant objectives which I am going to briefly point out.
The most significance objective that IRISL pursued when buying Moalem Insurance’s shares was closely tied to the political conditions, seeing that Iranian enemy’s major intention was preventing IRISL fleet from venturing in international waters. Nevertheless, focused attention and the P&I coverage that Moalem Insurance provided
alleviated the sanctions to a large extent. After the lifting of the sanctions, the objectives were shifted to the development and expansion of maritime insurance in Iran. To this end, Moalem Insurance, as the first and the only maritime insurance firm in Iran, intends to launch a maritime insurance section in the near future.
As far as the performance of IRISL is concerned, I can state that through many years of insurance activities, IRISL’s impact has vividly revealed itself in insurance industry, in such way that all IRISL Group’s vessels, staff and properties have been covered by Iran’s insurance industry; and this trend has been growingly improving.
It can be prognosticated that once Moalem Insurance enters the stock exchange market, maritime-based firms will be highly interested to purchase its shares.
What goals did Moalem Insurance pursue when it commenced to insure IRISL fleet?
Initially, insurance industry was not highly interested to enter P&I insurances; yet, through collaborating with the government and shipping lines, central insurance agreed to enter P&I insurances via Moalem Insurance. In fact, this matter had to happen. The decision was made and put into practice successfully. The collaboration of IRISL experts and central insurance led to the foundation of P&I in Iran, and special coverage services were offered through cooperation and support of central insurance.
What issues and challenges did you have to face while founding P&I in Iran?
The most significant challenge ahead of founding P&I insurance services was receiving reinsurance, because the coverage that the ships needed were really extensive. This challenge was overcome by the collaboration of central insurance and government, and it did not deter Iranian fleet from their venture since other countries accepted this insurance. The trade still went on.
Other than Moalem Insurance, has any other Iranian insurance firm entered P&I insurance?
Negative, Moalem Insurance is the only Iranian insurance that has entered P&I insurance. Other insurance firms have provided their support through supplying reinsurance, though.
What challenges and problems were insurance firms, particularly Moalem Insurance, faced with at the sanction’s era?
As a matter of fact, political issues apart, sanction brought about benefit for Iran’s insurance industry. Prior to sanctions, Iranian shipping lines showed no interest in using domestic insurance, and this trend was the main reason why sanctions laid serious consequences. Had Iranian shipping lines collaborated with Moalem Insurance instead of foreign insurance brokers, they would not be facing problems for receiving their compensation at present. These compensations were set since several years ago, though.
The fact that undergoing sanctions is not a good even cannot be denied. Nonetheless, the sanction gave rise to good potentials as far as Iranian maritime insurance industry is concerned. In fact, Iranian insurance firms, particularly Moalem Insurance, managed to stage a successful performance. Along with P&I insurance, Moalem Insurance was able to cover ships’ machineries, as well. However, the insurance of ships’ body and machineries was far different from P&I insurance. International ports are not as strict about the insurance of ships’ body and machineries as they are about P&I. Moalem Insurance had noticeable achievements in the field of insuring ships’ body and machineries; nevertheless, it ran into issues in cargo carrying insurance. Due to the services that Moalem Insurance offered to IRISL fleet, it was placed in the list of sanctions by the European Union and US Treasury, and this caused many banks to refuse from accepting Moalem Insurance policies.
How did the execution of JCPOA influence the activities of insurance companies?
Once JCPOA was executed, over 20 international insurance brokers had already entered Iranian market to find a chance to offer their services. But we were still encountering two challenges: first, brokers had to include some conditions in their policies to prevent from losses of domestic insurance industry in case the sanctions were reinstated. The second problem, as well, involved paying and receiving the compensations. That is to say, transferring money was a big issue. Negotiations were commenced with a large British broker (RFIB), and primary agreements were made. The broker promised to pave the conditions for Moalem Insurance to use foreign capacities for maritime insurance purposes.
We do hope that by the upcoming 45 days, when the deadline for the renewal of IRISL ships’ body insurance is due, the insurance policies of this British broker will have been sent to Moalem Insurance so that we could obtain the approval of central insurance, as well. Provided that the current problems are tackled, we will dedicate a share of the market to this broker.
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