Since Insurance companies enter reinsurance agreements for one or more reasons, Mellat insurance company as the largest Iranian insurance company in the private sector,like all other direct insurance companies, participates in some reinsurance activities. All types of reinsurance contracts aim at several goals in the framework of increasing underwriting capacity, risk capital improvement and diversification, risk reduction, stability of the results and protection against catastrophes.
Mellat reinsurance department practices both Outward and Inward activities, locally as well as internationally to have more stable financial results. Using reinsurance will allow us to participate in a diversity of risks using the same working capital by ceding part of the risk and keeping a smaller portion of each risk. The use of reinsurance allows our company to partially transfer risks off our balance sheet.
Furthermore, through the reinsurance activities in several markets with different insurance and reinsurance companies we can have the ability to acquire significant knowledge of the different products, markets and insurance techniques like underwriting, administration of the policies and claims assessment.