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BACK             Issue No. 2/2001
 Reinsurance Treaties of ECGA renewed

 Regional meeting for Africa - Middle East to be held in Amman, Jordan

 Omani Non-Oil Exports increased

 Two of ECGA's Officers attended training courses with Coface-La Defense and Coface UK

 ECGA paid a total of 3 claims during the year 2000/2001

 Export Credit Insurance services continue to grow

 Questions and Answers

 Tips to Exporters

 Domestic Credit Insurance to be made available by ECGA to Exporters



Reinsurance Treaties of ECGA renewed  
ECGA’s reinsurance treaties for the year 2002 have successfully been renewed by the reinsurers. The Agency maintains two separate treaties: Quota Share Reinsurance Treaty with the private international reinsurers with the lead reinsurer – Namur Re as well as Excess of Loss Treaty which has now been enhanced with Coface through its association within the Credit Alliance Network. The treaties provide reinsurance protection to ECGA’s growing exposure against both commercial as well as political risks. This is very encouraging to ECGA considering prevailing situation in the insurance and reinsurance markets following the September 11th tragic events. The success of the renewal of the Agency’s reinsurance treaties were attributed partially because of its highly professional sound underwriting system of ECGA which is characterized with very low claim loss ratio.


Regional meeting for Africa - Middle East to be held in Amman, Jordan 
The 2nd Regional Meeting of Africa-Middle East Region for Credit and Info Alliance members to be held locally outside Paris will take place from April 3rd to 4th in Amman, Jordan. Jordan Loan Guarantee Corporation Ltd. (JLGC) is honored to host the upcoming meeting. The 1st Regional Meeting was hosted by ECGA of the Sultanate of Oman in Muscat of last year. The Regional Meeting include ECAs from a number of countries in the Middle East and Africa that are members of the Credit Alliance as well as Info alliance members that is credit information agencies from the region and COFACE. It is worth mentioning that JLGC will take this opportunity also to launch @ rating in the Jordanian market.

Mr. Nasir bin Issa Al-Ismaily, the General Manager of ECGA who is the Regional Coordinator of Africa-Middle East Region and member of the General Steering Committee of the Credit Alliance will also attend the meeting. He will be reviewing to the members the Progress Report and other outstanding issues to the Regional members following the General Steering Committee Meeting of the Credit Alliance held in Paris in January 23, 2002. It is also worth mentioning that the Islamic Corporation & Investment Export Credit (ICIEC) has been invited to the upcoming meeting in Amman, for Africa - Middle East Region and will attend for the first time following the approval of the General Steering Committee of Credit Alliance..


Omani Non-Oil Exports increased  
As per the latest statistics obtained from the Ministry of National Economy, Omani non-oil exports for the year 2001 were RO.843.4 million compared to RO.746.4 for the corresponding period of the year 2000. The total non-oil exports consist of both re-exports as well as Omani produced exports. The Omani produced non-oil exports were RO.265.8 million or 31.5% of total non-oil exports while re-exports were RO.577.6 million. Omani non-oil exports registered increases of 7.2% for the Year 2001 compared to RO.247.8 for the year 2000. Non-oil Omani exports include such products as dates, lemon, mineral water, livestock, textile, vegetable oils and other industrial produced products. The re-exported goods include foodstuff, beverages, tobacco, machinery, electrical equipment, spare parts and other products.


Two of ECGA's Officers attend training courses with Coface-La Defense and Coface UK 
Two of ECGA’s staff – Mr. Imaad bin Soud Al-Harthy – the Claims Officer and Mr. Ahmed bin Khalfan Al-Balushi the Underwriting Officer attended Underwriting and Claims courses organized by COFACE at its head quarters in Paris – La Defense from March 11 to 19 and at Coface – UK which is a subsidiary of COFACE from 20 to 22 March 2002. The courses covered various areas of underwriting, claims, IT application, marketing, etc.


ECGA paid a total of 3 claims during the year 2000/2001  
ECGA paid a total of RO.23043 for three claims during 2001. Two of the claims paid last year were to Sadolin Paints (Oman) Ltd. to buyers in the United Arab Emirates and Kuwait pertaining to the underwriting year 2000 for total amount of RO.11.043. Another claim of RO.12000 was paid to Poly Products LLC for exports made to the buyer in the United Arab Emirates pertaining to the underwriting year 2001. ECGA’s claims loss ratio for the underwriting year 2001 was only 5.2%.
Export Credit Insurance Services continue to grow  
The Export Credit Guarantee Committee under the chairmanship of H. E Sheikh Yaqoob bin Hamed Al Harthy approved a number of requests from the exporters. During the year 2001, the Export Credit Guarantee Agency (ECGA) had issued a total credit insurance cover of RO.140.25 million to exporters compared to RO.116.9 million in 2000 – an increase of almost 20%. The number of credit insured exporters in year 2001 rose to 135 compared to 110 in 2000. Moreover, the number of overseas buyers to whom ECGA provided credit insurance cover rose to 2703 in year 2001 from 2310 in the year 2000 which represents an increases of 17%. Number of countries of credit insured exports reached to 88 by the end of the year 2001.


Questions and Answers
 
Q- Are you sure how well your customers are doing?
A- A company growing too rapidly, and not in full control of its growth, risks becoming insolvent. Its not easy to see the warning signs. According to studies, up to half of bad debts arise from long-standing clients who were previously prompt players. A credit insurance policy from ECGA is your protection against non-payment by domestic and foreign customers.

Q- Canyou afford to grant Credit to your customers?
A- On an average, 40% of company’s assets are tied up in the form of commercial debt. All it takes for an otherwise well run business to become insolvent is for one major customer not to meet its payments. Even smaller debts can have a destructive effect. For example, if your profit margin is 5% and your client’s debt is just RO.10000, your company will have to achieve additional sales of RO.100000 just to make up for the loss. A credit insurance policy from ECGA can protect from the consequences of such an event.

Q- Are you sure how well your customers are doing?
A- A company growing too rapidly, and not in full control of its growth, risks becoming insolvent. Its not easy to see the warning signs. According to studies, up to half of bad debts arise from long-standing clients who were previously prompt players. A credit insurance policy from ECGA is your protection against non-payment by domestic and foreign customers.

Q- What are the advantages of ECGA's export credit insurance policies?
A- By giving credit to overseas buyers, exporters may be exposed to possible loss of not being paid. ECGA’s export credit insurance policies allow Omani exporters to diversify into new and unfamiliar markets and extend credit terms for better competitiveness. The additional advantage of these policies is that they can be assigned as additional security to commercial banks in the country for export financing.

Q- What is the Credit Alliance and when did ECGA join it?
A- Credit Alliance is an international network of 49 credit insurers world wide operating under the auspices of COFACE of France with over 55 years of experience. ECGA joined the Credit Alliance in 1996. As a member of the Credit Alliance, it enables ECGA to:

Access credit information and risk exposures on buyers world wide

Be informed on competitive rate for credit reports quickly

Be associated with a world-wide collection network

Share experiences on buyer/country world -wide

Get faster service in approving coverage




Tips to Exporters 

  By insuring your account receivable with ECGA, you are able to protect your cash flow and profits against bad debt loss, expand sales to new and existing customers and markets without increasing risk, and enhance your relationship with lenders – allowing you to potentially borrow more working capital and secure better financing terms.

 ECGA’sCredit Insurance Policies allow you to sell with confidence, giving valuableprotection against the consequences of domestic or overseas customer insolvencyand non-payment.

 Banks can feel secure in lending more when their customer’s accounts receivable are insured by ECGA.

 Whatever you trade, you want to be paid. And in an uncertain world, you need financial protection. A credit insurance policy of ECGA could be the answer. Wherever you trade, ECGA’s policies cover you against the damaging consequences of unpaid domestic and overseas debt and customer insolvency, as well as political risk.

 If your customer can’t pay, ECGA will. Commercial risks are innumerable. Sometimes the slightest event can result in non-payment. It’s vital that you protect your turnover. Credit insurance from ECGA offers you protection you need.

   
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