Dubai's export insurance agency eyes 150% growth

Dubai-owned Export Credit Insurance Company of the Emirates (ECIE) is positive that the value of assets it is insuring will more than double in the 12 months as export market and economy as a whole revive.

The firm, launched in October 2008, is looking at boosting its insured assets to at least Dh2.5bn next year from the current Dh1bn. The company also plans to add distribution firms to its clientele list in addition to manufacturing, and expand on bonds security market.

"We're looking at increasing by 150 per cent and this is just a rough estimate. With education gaining phase, this could grow two to three times more," said Schuyler D'Souza, Chief Commercial Officer of ECIE.

"We see marginal growth in export market. Growth this year is steady and it will not be exponential until early 2011 after which there is five-year period of growth," he said.

"Exports will continue to grow and we help not only in low- and medium-risk markets, we also help in high-risk markets. We are willing to go to tricky markets – not just OECD – we're in Sudan and other Southern African countries."

He said there have been no claims but should there be a case, injecting liquidity is not a problem.

"We are 100 per cent owned by Dubai Government and the only locally-capitalised export insurance agency. And that's our strength," he added.

"If a catastrophic event comes and you lose $2 million [7.34m], which could put severe cash flow problem, we can inject this Dh2m immediately if this is a bankruptcy and it if it's a protracted default we'll talk to buyer and get the money," said D'Souza.

Export credit risk insurance covers manufacturing, trading and service organizations against the risk of loss that could occur due to the insolvency (declared or presumed) of their buyers.

Presumed insolvency involves non-payment of a receivable outstanding beyond the protracted outstanding beyond the protracted default period, usually six months, from the invoice due date, although the buyer may not officially be declared as bankrupt.

This has become a common concern as of late as many real estate and construction related-companies default on their obligations.

Coface, a global trade receivables management which reinsures ECIE, is currently chasing about Dh300m owed to overseas suppliers by firms based in the UAE mostly because local developers are failing to pay global suppliers.

ECIE's other partners include the Islamic Corporation for the Insurance of Investment and Export Credit, the Islamic multilateral based in Saudi Arabia and Kuwait-based Arab Investment and Export Credit Guarantee Corporation (Dhaman).

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