One of the unintended consequences of the global financial crisis is the increasing awareness of the risks and how to manage risk in business, trade and investment.
One option is through export credit risk management and political risk insurance, as well as exporters, importers, and bankbank who finance them. Now in many developing countries found in this product. However, export credit and investment insurance culture in the 56 member countries of the Organization of Islamic Conference (OIC), is still lagging.
Despite the fact there are signs that this is beginning to change. Main drivers behind this industry in these countries Jeddah-based OIC is the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), an independent member of the IDB Group.
Here's an interview with the CEO of Jeddah-based Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) Abdel Rahman Taha learned from arabnews.com.
What happened in 2009 then?
Last year investors have enough problems peli. Whether caused by the credit and political risk. We also have to pay the claims of some companies. But of course compared with the funds we have, and payment of the claim amount, less impact on our revenue or about 15 percent of the loss ratio (percentage of premium revenue used to pay claims).
In 2009 the volume of business was also reduced substantially by 29 percent. However, new approvals increased from USD1, 7 billion to $ 2, 1 billion for the same period. It shows our customers have the intention to conduct new business and applied for a credit line that we approved.
Did it happen because of the design or the strength of market conditions?
Usually short-term business accounts for 75 percent of our business. But in 2009, business increased substantially over the medium term to account until 40 percent of the total underwriting business. It is a demand-driven business. The biggest demand for insurance business and long-term investment projects in countries, like Sudan.
We also support new types of companies from our member countries. ICIEC Suweidi contribute to the company that transformed itself into a multinational company. By using political risk insurance and investment, they can go to countries and markets that otherwise they would not be able to do business in certain counterparts.
Is there a greater awareness of the need for export credit insurance and investment in member countries are you?
Yes it has improved, but the awareness and use of this produkproduk still very low. One of the unintended benefits from the financial crisis is to raise awareness of the risks and how to manage risk. A good way to manage risk is through export credit insurance.
So this is reflected in the first quarter of 2010?
New commitments for the first quarter of 2010 compared with same period in 2009 has increased by 50 percent from USD474 million to USD710 million, the actual insured business increased 77 percent from USD228 million to USD403 million. Previously, we have many problems in convincing the banks in our member countries to accept our policies as security and collateral for their loans.
Now the banks started to come because they realize, and this allows them to expand their business. This process is also aided by the fact that ICIEC rated AA three years ago by Moody's, which was reaffirmed in November after a crisis.
With the increased volume of business, whether you are planning an increase in capital to support underwriting new?
That is a very good question, because if the business continues to grow, we predict the end of 2010 we will spend our capabilities. With a capital of USD250 million, we also use an average of reinsurance that we deliver around 40 percent for the international reinsurance industry, especially for Lloyd and others.
There should be a balance between the money that is divided and the risk of getting sharing. Until now we feel that 40 percent of income is the right balance and we did not want to add this because if we do, just be an agent for the reinsurance market
One option is through export credit risk management and political risk insurance, as well as exporters, importers, and bankbank who finance them. Now in many developing countries found in this product. However, export credit and investment insurance culture in the 56 member countries of the Organization of Islamic Conference (OIC), is still lagging.
Despite the fact there are signs that this is beginning to change. Main drivers behind this industry in these countries Jeddah-based OIC is the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), an independent member of the IDB Group.
Here's an interview with the CEO of Jeddah-based Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) Abdel Rahman Taha learned from arabnews.com.
What happened in 2009 then?
Last year investors have enough problems peli. Whether caused by the credit and political risk. We also have to pay the claims of some companies. But of course compared with the funds we have, and payment of the claim amount, less impact on our revenue or about 15 percent of the loss ratio (percentage of premium revenue used to pay claims).
In 2009 the volume of business was also reduced substantially by 29 percent. However, new approvals increased from USD1, 7 billion to $ 2, 1 billion for the same period. It shows our customers have the intention to conduct new business and applied for a credit line that we approved.
Did it happen because of the design or the strength of market conditions?
Usually short-term business accounts for 75 percent of our business. But in 2009, business increased substantially over the medium term to account until 40 percent of the total underwriting business. It is a demand-driven business. The biggest demand for insurance business and long-term investment projects in countries, like Sudan.
We also support new types of companies from our member countries. ICIEC Suweidi contribute to the company that transformed itself into a multinational company. By using political risk insurance and investment, they can go to countries and markets that otherwise they would not be able to do business in certain counterparts.
Is there a greater awareness of the need for export credit insurance and investment in member countries are you?
Yes it has improved, but the awareness and use of this produkproduk still very low. One of the unintended benefits from the financial crisis is to raise awareness of the risks and how to manage risk. A good way to manage risk is through export credit insurance.
So this is reflected in the first quarter of 2010?
New commitments for the first quarter of 2010 compared with same period in 2009 has increased by 50 percent from USD474 million to USD710 million, the actual insured business increased 77 percent from USD228 million to USD403 million. Previously, we have many problems in convincing the banks in our member countries to accept our policies as security and collateral for their loans.
Now the banks started to come because they realize, and this allows them to expand their business. This process is also aided by the fact that ICIEC rated AA three years ago by Moody's, which was reaffirmed in November after a crisis.
With the increased volume of business, whether you are planning an increase in capital to support underwriting new?
That is a very good question, because if the business continues to grow, we predict the end of 2010 we will spend our capabilities. With a capital of USD250 million, we also use an average of reinsurance that we deliver around 40 percent for the international reinsurance industry, especially for Lloyd and others.
There should be a balance between the money that is divided and the risk of getting sharing. Until now we feel that 40 percent of income is the right balance and we did not want to add this because if we do, just be an agent for the reinsurance market
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