Global insurers plot cautious course to Iran

* Iranian insurers see tie-up interest from foreign players

* Local insurance market worth $7.4 bln in premiums

* Iranian players seeking credit ratings to helppartnerships

* Caution remains over U.S. restrictions still in place

By Bernardo Vizcaino and Carolyn Cohn

SYDNEY/LONDON, Jan 24 (Reuters) - Global insurance firms arecircling Iran for business opportunities following the liftingof sanctions - and the first test of their appetite could comein March when some Iranian companies seek new cover.

Insurers, the reinsurers that share their risk and thebrokers that forge deals are exploring ways to tap a marketworth $7.4 billion in premiums after a nuclear accord betweenworld powers and Tehran led to the removal of restrictions onfinancial dealings with Iran this month.

Allianz, Zurich Insurance, Hannover Re and RSA, for example, said in recent daysthat they would evaluate potential opportunities in the country.

Insurance and reinsurance specialists regard the marine andenergy sectors as among those offering the best opportunities inoil-producing Iran. Alongside commercial cover, life insuranceis a potential growth area as it represents less than a tenth ofoverall Iranian premiums, compared with more than half globally.

At first international companies are likely to link up withIranian firms to capitalise on their local knowledge and toreinsure local insurance in the international market, accordingto industry experts, with international brokers helping foreignfirms get that business.

American insurance industry players are still banned fromdoing business in Iran, however, due to separate U.S. sanctionsthat remain in place.

The insurance contracts of some Iranian companies expirewhen the Persian calendar year ends in late March - similar tothe January renewal season in Western countries - and they willbe looking to strike new agreements. This could includeinsurance firms themselves seeking new reinsurance cover.

Mohammad Asoudeh, vice chairman and managing director ofIranian Reinsurance Co, told Reuters he had already beencontacted by foreign insurance players looking to forge tie-upswith his company and enter the market.

"They have been waiting for Implementation Day," said the30-year industry veteran, referring to the day this month whenthe U.N. atomic agency confirmed Tehran had met its commitmentsunder the nuclear deal. "We have had enough visits (from foreignfirms)... resuming business could be quick but will depend onthe terms and conditions they offer us."

"There are some market renewal dates in two months' time.This will be a good point to start."

Sasan Soltani, regional business development manager atDubai-based but majority Iranian-owned Iran Insurance Company,said his firm had also been approached about tie-ups by Britishand Japanese brokers and insurers.

HURDLES REMAIN

Foreign players have been awaiting the lifting of sanctionsfor months; eight out of 11 established Western and Middle Eastinsurance and reinsurance firms who responded to Reutersquestions last year said Iran was an attractive market,especially in the marine and energy sectors.

However despite the lifting of sanctions, hurdles stillremain which are making companies cautious about a speedy entry.

The U.S. curbs still in place exclude American nationals,banks and insurance industry players from trading with Iranincluding dollar business, so concerns remain on whether otherforeign insurers can transact without the risk of penalties.

London-headquartered United Insurance Brokers (UIB) said itwas active in Iranian reinsurance before the imposition ofinternational sanctions and planned to reopen its Tehran office"as soon as we can", according to chairman Bassem Kabban.

"Under the sanctions we ceased to operate, but we havemaintained the salaries of our people there for the pastfive-and-a-half years," said Kabban, adding that firms could bewary due to concerns about having U.S. shareholders orsubsidiaries.

"People will be very careful what to do. If they are notsure, they would rather not do it."

He said, though, that French and Japanese players werelikely to be quickest off the blocks in providing reinsurance asthey had large presences in Iran in the past, adding thatsectors such as aviation, power generation and energy wouldrequire large amounts of cover.

Reinsurers help insurers shoulder the burden of large lossesin return for a proportion of the premiums.

Another London-based broker said his firm had decidedagainst opening an office in Tehran for now, preferring not totake the risk of being a "frontrunner".

While Iran has 27 direct insurance companies and tworeinsurance firms, most established in the last 10 years, theylack international credit ratings because they have been shutout of markets.

This could also deter foreign firms and their penalty-warycompliance departments from doing business with them.

Iranian Reinsurance Co. is now working to obtain a ratingand has held discussions with two rating agencies for thispurpose, said Asoudeh, declining to name them.

"Because of sanctions they couldn't price it, so this isfirst in our agenda. Several insurance companies in Iran arealso waiting to be rated."

Currently around 4 percent of total Iranian insurancepremiums are ceded to reinsurers, which would amount to anestimated $300 million of reinsurance business in the country,said Asoudeh. Reinsurance volumes are expected to pick up withwider access to foreign players, he added. (Additional reporting by Jonathan Gould; Editing by PravinChar)