‘UAE exporters need support’
Lack of insurance capacity and insurance coverage is a main concern for UAE exporters, said Massimo Falcioni, CEO of Etihad Credit Insurance (ECI). He was quoting the results of a survey conducted by the ECI among exporters associated with the Chambers of Commerce within individual emirates in the UAE.
Speaking at the UAE Export Finance, Insurance and Reinsurance Forum, he said that the main challenges of exporters within the UAE revolved around collecting payments, being paid on time, inability to penetrate high growth market segments, cost effective logistics methodologies, and lack of access to funding and insurance risk coverage as well as support.
“Corporates told us that they mostly go with advance payment or cash payment. Only three percent sell on credit. How to compete against other worldwide companies which use solutions of export credit and political insurance so that they can give better economical solutions? This is a limiting factor that we saw in all sectors,” he observed.
“When it comes to exporting, having a great product or service is just half the story. In this kind of complex economic world we are in at the moment, putting the right finance and insurance in place can really make the difference. It is not only a commodity and accessory that can compete to be successful,” he quoted.
Reflecting on the several benefits of export credit insurance he said that the cover would protect from unforeseen losses, reduce the cost of credit management, enhance risk management, improve finances and render access to new markets.
Delivering the keynote address, Juma Al Kait, assistant undersecretary, Foreign Trade Affairs, UAE Ministry of Economy, said: “Initiatives such as these reflect the strong emphasis that the UAE has placed on encouraging growth of exports, facilitating our exporters, easy access to various competitive global markets. And on insuring export, facilitate diversification to be more resilient in the face of the global trade risk. Such efforts are a vigorous manifestation on how keen and how determined the UAE is on promoting its export and supporting its exporters as well as the foreign investment activities of its companies including the private sector. Thereby we ensure protection of foreign investment activities through the implementation of risk insurance policies and by spreading awareness through its strong bilateral and economic relations with countries from around the world.”
The conference also featured a presentation on the Aircraft Finance Insurance Consortium by Leslie Kurshan, managing director, Specialty Practice, Marsh UK, a session typical hedging instruments and template policies expected by international banks from export credit agencies by Alarik d’Ornhjelm, director, Structured Trade & Export Finance MEA, Deutsche Bank, and a panel discussion on the role of export finance and insurance.