Validus Holdings , a Bermuda-based reinsurer owned by American International Group (AIG), has decided to cease offering insurance coverage to Iranian shipping companies.
In the wake of America reimposing the sanctions on Iran, Validus Holdings will not underwrite the insurance for shipping firms that transport consignment to and from Iran, Reuters reported citing a filing by AIG.
The consignment mainly includes crude oil shipped from Iran and refined petroleum products shipped to Iran, according to the publication.
Validus subsidiaries outside the US offer the Iran-related insurance services such as coverage for vessels, war, cargo and liability.
AIG told the publication that the company is also exiting some reinsurance policies involving Iran.
In July, AIG obtained a licence from the US Office of Foreign Assets Control to carry out Iran-related businesses.
In May, America pulled back from a 2015 nuclear deal between Iran and six major powers and reinposed sanctions on Tehran.
After that, European insurance companies, reinsurance firms, brokers and shipping companies began shutting down Iranian operations to avoid the American penalty.
The sanctions, which targets Iran’s oil, banking and transportation sectors, became effective from 4th November.
AIG has posted a net loss of $1.3bn for the third quarter of 2018, compared to a net loss of $1.7bn a year ago.
The insurer said that reinsurance agreements enabled it to offset catastrophe losses in Japan and North America and led to reduction in losses.
For the quarter ended 30 September 2018, AIG’s adjusted after-tax loss stood at $301m, compared to an adjusted after-tax loss of $1.1bn in the prior-year quarter.
“While managing a significant number of global catastrophic events, General Insurance continued to make progress against key initiatives, including improving underwriting capabilities, repositioning reinsurance structures, adding world class talent and driving efficiencies.
“We remain on track to produce an underwriting profit. Life and Retirement achieved increased sales and solid double digit returns, reflecting the strength of our product expertise and distribution networks.”