Iran insurance processing may soon be blocked on Lloyd’s IT platform

Iran Insurance processing could be blocked - brick wall

Sanctions from the United States will likely get in the way of using the platform for this purpose.

New U.S. sanctions will likely make it impossible to purchase any form of Iran insurance using a Lloyd’s of London platform. This will only worsen struggles for European insurers that have been providing Iranian coverage.

The sanctions are being re-applied by the United states after it backed out of the nuclear deal.

President Trump walked out on the Iran nuclear deal in May. The remainder of the world powers that originally joined the United States in the Iran accord recently chose to keep their promise. Moreover, they have offered the country economic support to help it to overcome the sanctions the United States would reinstate.

The U.S. will start applying its Iran insurance and reinsurance sanctions starting on November 4. This has forced a number of European insurance and reinsurance companies to phase out of their Iranian business.

The companies have been selling Iran insurance since the sanctions were originally lifted in January 2016.

European insurance companies, including Lloyd’s of London, have been selling coverage for energy, marine and trade credit to Iran. The agreement among the world powers, including the United States, was reached in 2015. This caused the Iran sanctions to be lifted at the start of 2016.

Removing the sanctions meant European companies were able to return to trading with Iran without risking penalties by the United States. That said, it also made it possible for American firms with foreign subsidiaries to enter into Iranian trade.

That being the case, Bruce Carnegie-Brown, Lloyd’s of London chairman, said in a Reuters report, that imposing the U.S. sanctions against Iran once again would “probably” stop Lloyd’s platforms from being able to process insurance business with Iran. Since 2017, Lloyd’s has been partially owned by an American firm: DXC.

Iran Insurance processing could be blocked - brick wall“You can do it through Lloyd’s through other settlement mechanisms outside DXC, it’s just more complicated and more expensive to do it that way,” explained Carnegie-Brown about the Iran insurance. “There is a bit of an evaluation going on about what business opportunities there are, in any event.”

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