Welcome to the presentation on Role of ECGC IN

1. Welcome to the presentation on Role of ECGC IN PROMOTING TRADE AND INVESTMENTS WITH BRICS COUNTRIES

2. “Anything is possible”, said an intellectual, and “my experience is that the contingencies not provided for are those which happen” SAYING

3. Political instability and civil disturbances in a number of countries such as Afghanistan, breakup of the erstwhile Soviet Union,Syria, Libya continuing events in Africa and South America Transfer delay problems due to scarcity of foreign exchange as in Nigeria, Argentina, Mozambique. Collapse of banks such as in Russia after shift towards market economy Collapse of banks like Meryll Lynch,Lehman Bros., and Insurance companies like AIG … NOW!! Risks in Export Transactions

4. New business is formed Company changes its name Directorship changes Share ownership changes Company changes control AND More than one Company Fails Every day! Analysis of data by an Int’l Agency shows that in Advanced Economies EVERY DAY MORE THAN one ….

5. Know your customer! Know their country! Know their “credit” bank! Understand the trade cycle! Understand Terminology! Understand Transaction Risks! Understand Ground Rules! General Trade Concepts

6. Definition:- Risk Management Can be defined as identification, analysis and economic control of risks that threaten the assets or earning capacity of the enterprises. RISKMANAGEMENT

7. STRATEGY FOR RISK MANAGEMENT. RISK IDENTIFICATION RISK ANALYSIS RISK ASSESSMENT RISK REDUCTION RISKMANAGEMENT

8. Type of Risk How to Mitigate Transit Risk Marine Insurance Exchange Risk Authorised Dealer Credit Risk Various Options GLOBAL TRADE RISKS

9. Types of Export Credit Risks

10. EXPORT INSURANCE Goods Receivables Loss or Damage Exchange Risk Payment Risk Hedging by Authorized Dealers Credit Insurance Marine Insurance

11. RISKMANAGEMENT How to overcome Export Credit Risk E C G C You focus on exports, We cover the risks

12. Providing Credit Insurance Covers to exporters against Credit Risk loss in export of goods & services Providing Export Creditrisk cover to banks to enable exporters obtain better facilities from them Providing Overseas Investment Insurance to Exporters - Indian Entrepreneurs in Overseas Ventures (Equity/Loans) Role of ECGC

13. Established 1957 No. of Branches 59 Branches ISO Certification HO and All branches certified Capital 1300 Cr Rating iAAA by ICRA Reinsurance Available for ST business 2015-16 PREMIUM INCOME 1320.74 Cr RECOVERY 114.43 Cr CLAIMS 1122.84 Cr DIVIDEND 88.00 Cr No. of Employees 633 Sanctioned A Brief Profile of ECGC

14. Covering 237 Countries Covering Direct Exports Deemed Exports Project Exports Merchanting Exports Consignment Exports Services Exports Software Exports IT-Enabled Services Exports Our Underwriting Capacity……..at a glance

15. offering cover even to the developing markets - Latin America, Africa, Asia & Asean Countries DP / DA terms are acceptable for cover in these countries Cover for LC Discrepancies Cover for LC’s opened by banks with more than 1,00,000/- WR ……’Contd

16. Risks Covered by ECGC RISKS POLITICAL RISK COMMERCIAL RISK COUNTRY BUYER BANK NON –LC LC TRANSACTION

17. Buyer Risks a) Insolvency b) Protracted default c) Failure to accept the goods LC opening Bank Risks a) Protracted default b) Insolvency Risks Covered

18. Risks Covered: Political Risks War, Civil War & Internal Disturbances in the buyer’s country Delay in the transfer of payment Shipment Diversion Import Restriction Causes beyond the control of the exporter and buyer

19. Commercial disputes Causes inherent in the nature of goods Buyer’s failure to obtain import license Insolvency / default of Agents Risks covered by general insurers Exchange rate fluctuation Failure of exporter to fulfill terms of contract RISKS NOT COVERED

20. Wholeturnover-principle Options for exclusion. Co-insurance Maximum liability Credit limit Declaration and Premium Prior approval for RC Countries IMPORTANT CONCEPTS

21. Financials, creditworthiness etc. Feedback – from other insurers Agreement with Credit Information Agencies Arrangement with D&B ECGC’s Past Experience Exporter’s Experience BUYER UNDERWRITING FACTORS

22. Political Situation Economic condition Relationship with India ECGC’s experience Experience of other Credit Insurers COUNTRY UNDERWRITING FACTORS

23. Standard Policy Small Exporters policy Specific Shipment Policy (short term) Export Turnover policy Specific buyer wise policy Consignment export policy Global entity policy Single buyer exposure policy Multi buyer exposure policy Software project policy IT enabled single customer policy IT enabled multi customer policy Customer specific (Tailor made) policy Products offered to Exporters

24. ECGC policy covers to exporters fall under 3 categories viz., Specific Transaction covers Turnover covers Exposure covers Specific Shipment Policy is a Transaction cover. A single shipment will be insured for Credit risks ECGC Policies

25. 2. Turnover covers: SCR, SEC and ETP polices are turnover polices. The exporter will insure his entire turnover barring certain exclusions mutually agreed with ECGC. Monthly declaration of shipments under SCR and quarterly declaration of shipments under SEC and ETP will be submitted. Premium is paid on the actual value of shipments declared. ECGC Policies

26. 3. Exposure covers: MBEP is an exposure based policy. Instead of taking insurance for the entire Turnover, exporter may choose to insure only a lower amount which he considers is at risk and that amount will be the exposure. A minimum of 10% of the projected turnover has to be offered as an exposure for cover ( Aggregate Loss Limit -ALL). On any single buyer 10% of ALL is covered for losses ( Single Loss Limit-SLL). Premium payable on exposure. ITES and MBEP covers are also exposure based covers. Exporter will have option to choose the exposure that meets his risk appetite. ECGC Policies

27. 4. Customised Policies: An exporter may choose to obtain a customised cover where he may opt for covering select shipments., select risks etc. Normally MBEP cover is taken as the base policy and additional exposure required on a buyer over and above the SLL can be insured under the same Policy or by issuing a Single Buyer Exposure Policy ECGC Policies

28. Small Exporters Policy & SME Policy Shipments [CR] Policy To Cover all Transactions • Export Turnover Policy • Multi buyer exposure To encourage Small Exporters Export Factoring For Large Exporters For MSMEs SHORT TERM COVERS Specific Shipments Policy Consignment & Global Entity Policy To cover Consignment exports To cover Specific Transactions To cover Services Services Policy,ITES,Software project • Exports (specific buyer) • Buyer Exposure To cover Specific Buyer Tailor made cover Customer Specific Policy

29. Thank YouPlease contact us atHDFC HOUSEM G ROAD, RAVIPURAMKOCHI 682 015PH: 0484-2359437/9457E-mail : kochi@ecgc.inwebsite: www.ecgc.in