CAPE TOWN — The Export Credit Insurance Corporation of SA is becoming more exposed to the mining industry as South African mining companies seek out investment and trade opportunities in the rest of the world, and particularly Africa.
The agency, which falls under the Department of Trade and Industry, was established in 2001 to provide export credit insurance for export transactions and to provide political risk insurance for outward investments from SA.
In the company’s annual report tabled in Parliament yesterday, CEO Patrick Kohlo said the planned projects are concentrated in the mining sector, constituting 45,6% of those approved by the board.
Infrastructure, at 19,5%, is second to mining, with the agro- industry (9,3%), accommodation and catering (7,1%) and other sectors making up 18,5% of all projects approved. Results tabled by the agency have also confirmed the big hit that trade suffered during the global financial crisis last year.
Its chairman, Tladi Ditshego, said that corresponding with the downturn in underwriting activity brought about by the international crisis, gross premium income for this financial year dropped to R156,9m.
That compares with the R170,3m recorded in the previous financial year.
The company plans to focus its efforts on offering its products to small, medium and micro enterprises by actively promoting supplier and buyer credit products for small or medium transactions with quicker turnaround times in the approval process.
The agency has also sought to aggressively pursue opportunities that are beginning to arise as a result of Africa’s burgeoning trade with the rest of the world, in particular China.
Saturday, September 18, 2010
Trade credit rates fall as capacity grows
New insurance capacity, increased insurer competition and improved risk management have led to positive developments for buyers of trade credit insurance across most of Europe, according to Marsh.
The broker’s latest data for 2010 suggests trade credit insurance rates are reducing in France, Germany, Italy and the UK.
Meanwhile, rates are stable or experiencing minimal increases in Belgium, Denmark and The Netherlands; and localised increases are being recorded in Greece, Portugal and Spain. Trade credit cover is also becoming easier to procure, with insurers no longer taking industry sector-wide underwriting decisions.
Tim Smith, Leader of Marsh’s trade credit practice in Europe, the Middle East and Africa, commented: “The trade credit insurance market has been transformed in 2010 with rates falling or stabilising in most key European markets. Following the recession and the widespread cancellation of cover in certain high-risk industry sectors, insurers are now writing more business and deciding cover on a company-by-company basis.
“As insurers have developed more sophisticated risk assessment techniques, so companies are more willing to share financial information and formalise their business order policies. This both aids insurance procurement and helps companies obtain better terms.
“Demand for trade credit insurance remains strong. Entry to the market by insurers new to the sector has increased capacity and competition for business among trade credit insurers. For companies seeking trade credit insurance, the outlook for the remainder of the year and into 2011 is very encouraging, especially for organisations with strong credit management procedures. “
The broker’s latest data for 2010 suggests trade credit insurance rates are reducing in France, Germany, Italy and the UK.
Meanwhile, rates are stable or experiencing minimal increases in Belgium, Denmark and The Netherlands; and localised increases are being recorded in Greece, Portugal and Spain. Trade credit cover is also becoming easier to procure, with insurers no longer taking industry sector-wide underwriting decisions.
Tim Smith, Leader of Marsh’s trade credit practice in Europe, the Middle East and Africa, commented: “The trade credit insurance market has been transformed in 2010 with rates falling or stabilising in most key European markets. Following the recession and the widespread cancellation of cover in certain high-risk industry sectors, insurers are now writing more business and deciding cover on a company-by-company basis.
“As insurers have developed more sophisticated risk assessment techniques, so companies are more willing to share financial information and formalise their business order policies. This both aids insurance procurement and helps companies obtain better terms.
“Demand for trade credit insurance remains strong. Entry to the market by insurers new to the sector has increased capacity and competition for business among trade credit insurers. For companies seeking trade credit insurance, the outlook for the remainder of the year and into 2011 is very encouraging, especially for organisations with strong credit management procedures. “
China Short-term Export Credit Insurance Hit $100B
September 17 -- China Export and Credit Insurance Corporation’s (CECIC) short-term export credit insurance premiums leapt 107.2 percent year-on-year to $104.39 billion as of September 15, reports China Securities Journal.
CECIC provided short-term export credit insurance for $42.3 billion worth of exports from China to emerging economies in the first eight months of 2010, up 91.2 percent year-on-year.
As of September 14, CECIC generated insurance premiums of $126.93 billion, 1.1 times the insurance premiums for 2009, of which export credit insurance premiums jumped 113.6 percent year-on-year to $110.19 billion.
Shares of Ping An Insurance (Group) of China (601318, 2318.HK) dropped 0.35 percent to close at 48.76 yuan today.
CECIC provided short-term export credit insurance for $42.3 billion worth of exports from China to emerging economies in the first eight months of 2010, up 91.2 percent year-on-year.
As of September 14, CECIC generated insurance premiums of $126.93 billion, 1.1 times the insurance premiums for 2009, of which export credit insurance premiums jumped 113.6 percent year-on-year to $110.19 billion.
Shares of Ping An Insurance (Group) of China (601318, 2318.HK) dropped 0.35 percent to close at 48.76 yuan today.
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