Etihad Credit Insurance reaffirms its commitment to support exporters as economies reopen

The agency's commitment comes as private insurers 'become more risk averse' amid tightening credit conditions

Trucks carry containers from a ship at Jebel Ali port in Dubai 14 March 2006. Dubai Ports World, owned by the United Arab Emirates government, announced on 09 March it would sell its newly acquired rights to operate six US port following overwhelming opposition to the deal in the US Congress. The free trade zone of Jebel Ali is some 40 kilometres (25 miles) from Dubai's centre. AFP PHOTO/RABIH MOGHRABI
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Etihad Credit Insurance (ECI) reaffirmed its commitment to support exporters in the country as economies gradually reopen in the wake of the Covid-19 pandemic.

The agency said in a statement on Wednesday that it would support companies even as private insurers become more risk averse "due to an environment that is characterised by weak demand, vulnerable supply chain, tight credit, and a weakened capacity to pay".

ECI, set up in 2018, provides guarantees and insurance solutions to mitigate the political and commercial risks of exporting by offering financing or refinancing for export transactions on behalf of the UAE government.

Global trade has been heavily affected by the restrictions put in place to stop the spread of Covid-19. In April, the World Trade Organisation forecast that global trade would fall between 13 per cent and 32 per cent in 2020, with all regions facing double-digit declines.

ECI said it recently helped a UAE manufacturer recover payments from a leading US firm that had filed for bankruptcy.

“Fortunately, the business transactions were already insured by ECI, otherwise collecting payments would have been extremely difficult due to the complexity of the bankruptcy procedures and the intricacies of the local laws and regulations in a foreign jurisdiction.”

It also supported a UAE-based SME to expand to more markets through a trade credit insurance policy.

“ECI plays a significant role in restoring confidence in the market by protecting companies from commercial and political risks, and increase their access to finance, new suppliers and frontier markets,” Massimo Falcioni, chief executive of the company said.

“As UAE economic sectors restart and borders reopen, more focus will be put on cash flow by both the buyers and sellers. Buyers will prefer to deal with sellers who can provide more liberal payment terms. Sellers, on the other hand, will also focus on their balance sheets and protect their main assets — their cash receivables.”

Last month, Etihad Credit Insurance and Abu Dhabi Exports Office (Adex) partnered to offer a full range of financial products to help UAE companies to boost exports and ease financing challenges amid Covid-19.

Adex has set aside Dh550m to help firms restart exporting, and both the entities will offer a full range of credit facilities including direct financing, guarantees and export credit insurance to businesses as part of the new partnership.

The UAE has taken various steps to help local companies as they adjust to a global economy that is gradually readying for business following a period of lockdown.

Abu Dhabi last month rolled out a digital platform to boost exports from the emirate to 60 target markets worldwide in an effort to expand its foreign trade.

The new digital platform, Abu Dhabi Export Gateway, will “offer an integrated approach” to export at least 100 local products from 10 different sectors, the Abu Dhabi Department of Economic Development said.