[PPT]Slide 1 - ICIEC ppt.pptx · Web viewThe types of technical assistance provided by the program: ITAP – IDB Group’s Investment Promotion Technical Assistance Program Client

1 Member of Islamic Development Bank Group


TABLE OF CONTENTS

Our Parent: IDB GroupICIEC : Who we are?ICIEC : Organizational CapabilitiesICIEC : Business ModelICIEC : Operational Support MixICIEC : Marketing MixICIEC: Product MixICIEC: ITAPICIEC: Track RecordICIEC: Industry RelationsICIEC: Business Indicators


)

International Islamic Trade Finance Corporation

(ITFC)

Islamic Corporation for the Development of the

Private Sector (ICD)

Islamic Corporation for Insurance of Investments

and Export Credits (ICIEC)

Islamic Research and Training Institute (IRTI)

Affiliated Institution


ISLAMIC DEVELOPMENT BANK GROUP

AAA rating(S&P, Fitch & Moody’s)


• Multilateral Developmental Bank established in 1975 with its headquarter located in Jeddah, Saudi Arabia

• Leading South-South Development Finance Bank owned by 56 member countries of the Organization of the Islamic Conference (OIC) that span across the Middle East, Africa, Asia and Europe

• Subscribed capital of US$ 34 billion• Rated AAA by the three major Rating Agencies (Standard & Poor's,

Moody's, and Fitch)• Designated as a Zero Risk Weighted Multilateral Developmental

Bank (MDB) by the Basel Committee on Banking Supervision and the Commission of the European Communities

Islamic Development Bank (IDB)


Human Development

Agriculture Development and Food Security

Infrastructure Development

Intra-trade Among Member Countries

Private Sector Development

Research and Development in IslamicEconomics, Banking and Finance

IDB: Six Priority Areas


IDB Current Areas of Intervention

Financing of Projects (Public

and Private)

Developing the Islamic Financial

Industry

Trade Financing and Promotion of Cooperation

Capacity Building

AgricultureInfrastructureIndustryEducationHealthSMEs, microfinancingOther sectors

Equity participation in Islamic financial institutionsDeveloping Regulatory frameworkResearch and training

Financing importsFinancing exportsPromoting trade cooperation

Disseminating of skills (exchange of experts, training, etc.)Supporting civil societies through NGOsSupporting women-in-development initiatives


IDB Current Areas of Intervention (Cont’d)

Risk Insurance

Research and Training

Asset Management

Special Assistanceand Scholarships

Country risk Short- and medium-term commercial risks Coverage of banks for Islamic financing products

Islamic banking and financeIslamic economicsTraining in related fields

Awqaf assetsInvestment portfoliosEquity fundsVenture capital funds

Support to Muslim minorities in non-MCsAlleviation of natural disastersScholarships for Muslim communities in non-MCs.Merit Scholarship Programs


• 22 countries in 1975 → 56 countries in 2009

• A Unique Model of South-South Cooperation

Africa: 27

Asia: 26Europe: 2

Latin America: 1

• 56 members spreading over 4 continents

Growth In IDB membership


Major Shareholders of IDB

24%

9%

8%8%8%7%

7%

6%

5%

17%

Shareholding Stake (%)Saudi ArabiaLibyaIranNigeriaU.A.E.QatarEgyptTurkeyKuwaitOthers


• Established in 1981 to undertake applied & basic research in Islamic Economics and Finance. Activities include:• Research Seminars & Conferences• Training Courses• Publications• IDB Prize in Islamic Economics, Banking & Finance• IRTI Scholarship for PhD in Islamic Banking

Islamic Research & Training Institute


o Established in 1999 & commenced its operation in July 2000 o Mandated to promote private sector development and to offer

advisory services to the private sector entities in member countries.

o An authorized capital of US$ 2 billion, paid up capital of US$ 470 million.

o 47 Islamic Countries are members of which 21 are in Africa.o Capital Structure (50% IDB, 30% MCs, 20% Financial

Institutions). o As of December 2009, cumulative business :

- Approvals : 185 Projects amounting to US$ 1.59 billion- in more than 32 member countries

Islamic Corporation for the Development of the Private Sector (ICD)


• Commenced business activities in January 2008.• It promotes and enhances intra-trade and trade cooperation

among 57 member countries of the Organization of Islamic Conference (OIC) through trade financing and promotion programs;• Authorized Capital : US$ 3.0 billion

• Subscribed Capital : US$ 750 million

• Managing Funds for other institutions : US$ 1.0 billion

• Year 2009 Trade Finance Approvals : US$ 2.1 billion

• Cumulatively Trade Financing, end 2009 : US$ 4.6 billion

International Islamic Trade Financing Corporation (ITFC)


THE ISLAMIC CORPORATION FOR THE INSURANCE

OF INVESTMENT AND EXPORT CREDIT

Aa3 rating(Moody’s)


IFSR Aa3

Credit Alliance

• ICIEC is a multinational institution with full juridical personality and multilateral status

• Established in 1994 & based in Jeddah – KSA with a representative office in DIFC - Dubai

• Owned by the Islamic Development Bank Group in addition to 40 member countries from Asia, Africa and Europe

• Subscribed capital is US$ 600 million• Rated Aa3 by Moody's• The only Export Credit Agency in the world that

provides export credit & Investment insurance in compliance with the Islamic Shariah

• Permanent Member in Berne Union, Coface Alliance, Prague club and founding member of AMAN Union


ICIEC Member Countries


ICIEC Major Shareholders

IDB; 67.46%

KSA; 9.11%

Morocco; 3.37%

Malaysia; 1.85%

Egypt; 1.69%

Kuwait; 1.69%

Yemen; 1.69%Turkey; 1.69%

Pakistan; 1.69%Others; 19.88%


ICIEC Milestones… 1415

• Establishment of ICIEC• Authorized Capital ±

US$ 153 mil

1416• Commencement of

Export Credit Insurance Operations


Investment Insurance operations

1426• Establishment of

ITAP

1428• Assigned Aa3 rating by Moody's

1429• Authorized Capital

increased to ± US$ 230 mil

1430• Full membership in

Berne Union• Founding AMAN union

1431• Operating Dubai

Rep. Office




ICIEC Milestones… 1994

• Establishment of ICIEC• Authorized Capital ±

US$ 153 mil


Export Credit Insurance Operations


Investment Insurance operations

2005• Establishment of

ITAP

2007• Assigned Aa3 rating by Moody's



2009• Full membership in

Berne Union• Founding AMAN union

2010• Operating Dubai

Rep. Office




IFSR Aa3ICIEC Rating

• ICIEC's rating reflects :• Both the stand-alone fundamentals as well as potential support

from its shareholders/IDB Group member countries. • ICIEC's legal structure and business nature, as the only

multilateral export credit and investment insurance corporation in the world that provides Shariah-compatible insurance and reinsurance products.

• Its enhanced regional knowledge based on its experience by operating in the region.

• As a member of the IDB Group, ICIEC benefits from various managerial synergies and support.

ICIEC was first rated Aa3 in 2007 and has maintained the same rating for 5 consecutive years with stable outlook


Organizational Capabilities


ICIEC Governance Structure

CEO

Board Of Governors

Chairman

Group Internal Audit

Group Risk Mgmt Group Strategic

Planning Group

Ombudsman Group Integrity

Advisory Committee

Board of Directors

Sharia Board


ICIEC Organization StructurePromotion &

Int’l relations unit CEOShort

Term

Insurance

Sales Division

Underwriting

Division

Credit

Information Division

Medium Term &

Investment

Insurance

Medium Term Insurance

Division

Investment

Insurance

Division

Dubai

Representative Office

Risk

Management

Regulatory & Monitoring Division

Country Risk Analysis Division

Clai

ms & Recovery Division

Reinsurance

Division

Accounting

& Finance

Accounting & Finance

Division

Treasury Division

HRM

Corporate Service

s

HRM Services

Administrative Services

Information Technology

Legal Affairs


ICIEC Corporate Governance Structure

Board of Governors

Minister of Finance /Central Bank Governor

Representing 40 Member Countries

Board of Directors

Advisory Committee

Shariah Committee

Chairman of the Board of Directors

Group Management Committee

Group Internal Audit Dept.

Group Risk Mgmt Dept.

Group Strategic

Planning Dept.Group

Ombudsman

Group Integrity Officer

CEO

ICIEC Management Committee

Underwriting Committee

Risk Management

Functions

Claims Committee

Investment Committee

Multilevel Self Governance


ICIEC Board of GovernorsAfghanistan

Minister of Finance

AlbaniaD. Minister of Finance

AlgeriaMinister of Finance

Azerbaijan Min. of Econ. Dev.

BahrainMinister of Finance

Benin

S. Minister Prospective Dev. & Evaluation of

Public Action

Darussalam Prime Minister

Burkina Faso

Minister of Economy

Cameroon Minister of Economy

Chad Minister of Economy

Union of Comoros Minister of Finance

Cote d'Ivoire Minister of Planning & Dev.

Djibouti Minister of Economy

EgyptMinister of Econ. Dev.

GabonMinister of Economy

Guinea Minister of Economy

Guinea Bissau Minister of Finance

IranMinister of Finance

IraqGovernor Central bank

JordanGovernor Central bank

Kazakhstan Minister of Economy

KuwaitMinister of Finance

Kyrgyz DCH Invest. Agency

Lebanon Prime Minister

LibyaSecretary for Plan. & Fin.

Malaysia Prime Minister

Maldives Minister of Finance

Mali Minister of Economy

Mauritania Minister of Econ. Aff. & Dev.


IDB Board of Governors (Cont’d)

MoroccoMinister of Economy

Mozambique Minister of Finance

NigerMinister of Economy

OmanMinister of Finance

PakistanMinister of Econ. Affairs

Palestine

IDB Unit, Palestinian Economic Board for Dev. & Recon.

QatarMinister of Economy

Saudi ArabiaMinister of Finance

SenegalMinister of Int’l Coop.

Sierra Leone Minister of Finance

Somalia Minister of Finance

Sudan Minister of Finance

Suriname Governor Central Bank

SyriaMinister of Finance

Tajikistan

CH of the Committee of Invest. & Prop. Mgmt.

TogoMinister of Coop. , Dev, & Land Mgmt

Tunisia Minister of Dev. & Int’l Coop.

TurkeyUndersecretary of Treasury

UgandaMinister of Finance

UAEMinister of Finance

Turkmenistan

Chairman of the Board of Foreign

Economic Affairs

Uzbekistan

Minister of Foreign Econ. Relations, Invest. &Trade

Yemen D. Prime Minister

NigeriaMinister of Finance


Dr Ahmad Mohamed Ali The President of the Islamic Development Bank Group (IDB)

Dr. Ali holds a B.A. degree in Commerce and a degree in Law from Cairo University, Egypt. He earned M.A. and PhD degrees, both in Public Administration, from the University of Michigan, Ann Arbor, and, State University of New York (SUNY), Albany, USA, respectively in 1962 and 1967. Dr. Ali began his career in education and manpower development with his appointment as Director, Scientific and Islamic Institute, Aden, Yemen, during 1958-59. Subsequently, he returned to Saudi Arabia and continued in the same path with his appointment as the Acting Rector of King Abdulaziz University from 1967 to 1972.

His contribution to the development of the people was recognized by the government of the Kingdom of Saudi Arabia and in 1972 he was selected to serve as Deputy Minister of Education and served his country for three years.

Upon the initiative of the late King Faisal Bin Abdulaziz, when the member countries of the Organization of the Islamic Conference (OIC) decided to establish the Islamic Development Bank, he was chosen as its first President

Chairman of the Board

ICIEC Management


Dr Abdul Rahman El Tayeb Taha The CEO of the Islamic Corporation for the Insurance of Investment and Export Credit

Dr.Taha has graduated and earned an MBA from the University of California, Berkeley in 1965 and 1966 respectively. He obtained his Ph.D. in Business Administration from the University of California, Los Angeles in 1970.

Dr. Taha lectured at the University of Khartoum, Sudan in business management, and then moved to the World Bank Headquarters in Washington D.C., where he served as an Economist and Senior Economist (1978-1984).

His association with trade finance started when he joined the Inter-Arab Investment Guarantee Corp., in 1984, where he worked as Director of Research, and Director of Operations up to 1990, when he moved to London to establish and manage a private company specializing in international trade and project finance. In 1993 he joined the Arab Trade Financing Program, an affiliate of the Arab Monetary Fund, in Abu-Dhabi as Director of Trade Finance.In 1994 he assumed his responsibilities as General Manager of ICIEC. In 2009 he was promoted to the position of Chief Executive Officer of ICIEC.

Chief Executive Officer

ICIEC Management


ICIEC Management

Khemais El-Gazzah The director of operations of the Islamic Corporation for the Insurance of Investment and Export Credit

Mr.Khemais has done his masters in Econmics and International Trade from Sfax and Tunis Universies repectivly in 1988. In 2009 has concluded the advance management program from INSEAD

Before joining ICIEC Mr.Khemais has held the postion of Director of Business Development in COTUNACE -Tunsian Export Credit Agency, before that he spent 7 years as an instructor in the Maghreb Institute of Finance (IFID) in Tunsia. Mr. Khemais has a combined experience of more than 23 years in the Credit Insurance Industry.

Mr.Khemais has remarkable contributions to the development of credit Insurance Industry in the region. He is a main Panelist to Middle East Trade & Export Finance Forum orgainzed by GTR and Exporta Publshing & Events Ltd. Mr.Khemais is also board member in the Allied Cooperative Insurance Group (ACIG), a publicly listed Insurance companybased in Saudi Arabia.

For the last 14 years, he played an important role in drivng business growth in ICIEC Export Insurance operations.

Director of Operations


Business Model


Main Services Provided

Export Credit Insurance Investment Insurance

Import Credit Insurance Domestic Credit Insurance


Export Credit Insurance

Member

Countries

To encourage exports from Member Countries to the rest of

the World

Investment InsuranceTo encourage the flow of capital and investments

from the World to Member Countries

Member

Countries

ICIEC Mandate…


ICIEC Takaful Model

Shareholders Fund

Reserves

Surplus

Deficit Financing

Wak

ala Fee

Insu

rance

Man

agemen

t

Capital Subscriptions

Investment Returns

Surplus

Policyholders Fund

Premiums

Recoveries

Surplus from Operations

Investment Returns

Profit share ( Shareholders Investment Returns)

Claims

Never occurred since inception


Policy Holders Fund• Insurance contributions• Fees and Expenses of insurance

operations

Shareholders fund• Paid-up capital• Associated reserves.

ICIEC Takaful Model

Risk Sharing

not Transfer

• Cooperative

Insurance not

Hedging

Win-Win Proposit

ion • Surplu

s Sharin

g

Actuarial Justness • Transpa

rent Platfor

m• Subscri

ption based

Separation of


Business StrategyIncrease Business

Volume

To achieve Portfolio Diversification

Reach the Critical Mass in Business Turnover

Maximize Developmental Impact

Trade Facilitation• Promote MC Exports• Support MCs’ requirements

of Food Security & Capital Goods

Investment Promotion• Provide Credit

Enhancement to Attract FDI to MCs

• Capacity Building to improve investment climate in MCs

Project Enabler• Give MCs access to more

affordable Project finance• Insure project risks to

encourage PPP

Maintain Strong Financial Health

Prudent Underwriting (Low Loss Ratio )

Risk Sharing through Reinsurance

Maintain Strong Risk Rating

Capital Preservation (Conservative Investment

Policy)

Achieve Sustainable Positive Technical Results


Underwriting ApproachStrong In-house UnderwritingDevelop a local

operational risk management expertise in

Trade Finance, Project Finance and Political Risk

Insurance Unique Field Expertise

Staying close the domicile of riskMaximize local

knowledgeRedefine common risk misperceptions in the

insurance market

Strategic Industrial Alliances and Partnerships

With Reinsures, Brokers, Financers,

ECAs to exchange knowledge & Cede risk

ICIEC’s Multilateral Edge

Leverage ICIEC’s strong relations with MCs

(governments & central banks) to mitigate transactions risks

Efficiency Capacity Utilization

More Appetite to ST insurance

Target markets that achieve more

diversification to business portfolio


ICIEC Value Proposition

Strong market

position in its core market

• Good access to a wide variety of sovereign markets

• Preferred Creditor Status

Enhanced regional

knowledge • Long

operational experience in the region

• Good Information Access in the event of political trade interventions.

Expertise & Support of

Islamic Finance

• The only multilateral ECA in the world that provides Shariah-compatible insurance products

Affiliation with IDB (Aaa)

• Managerial synergies

• Financial Support

Financial Flexibility

• Underlying capital support from member countries especially GCC countries (A+)

Resources Mobilization Capabilities

• Strong IFS rating (Aa3)

• Strong international network of alliances & reinsurance providers


Operational Support Mix


Risk Management Documentation


Country Risk Analysis

Own In-house Quantitative

Model

Country Grading range

(A to G)

Comparable with the market : Coface & EIU

NACE Sector Classification


Reinsurance

Facultative• Specified insurance

policy• Partners include:

Zurich, Starr, Dhaman & ACE Europe

• Percentage ceded :80%

Treaty• Covers all the insurance

policies coming within the scope of the contract

• Partners since 2004 : Atradius Re & Caltin

• Percentage ceded :60%


Description of ICIEC Outward Quota Share Treaty

Since July 2004, ICIEC has entered into QST contract with Atradius Re and Catlin for all its short-term Export credit. The agreement is on yearly renewable basis and still in-force now

09/10 08/09 07/08 06/07 05/06 04/05 Year of Agreement

40% 40% 40% 40% 70% 75% ICIEC’s Retention

39% 39% 39% 39% 24% 20% Atradius Retention

21% 21% 21% 21% 6% 5% Catlin Retention

Since 08/09, ICIEC has a Domestic Business Insurance and is ceding 100% of the risk to its Reinsurers against a ceding commission of 27.5%


Key Reinsurers RatingQuota Share Business

Atradius Re A- (S&P)

Catlin UK A (Strong, S&P)A (Excellent, A.M Best

Facultative Business

Zurich UK

AA (S&P)-ACE Bermuda

AA- (S&P)

Chubb (Federal) AA(S&P)

Sovereign AA- (S&P)

Garant A- (A.M Best)

Axis Re A+ (Stable, S&P)

Lloyd's syndicate

A.M Best: A (Excellent) stable outlook

Fitch: A+ (strong) stable outlook

S&P: A+ (strong) stable outlook


Credit Information

Categories of Service Rendered

• Credit Opinion• Credit Monitoring

• Credit Reports

Approved Information Providers• RIME Business Information (Buyers)• Creditsafe (Buyers)• SACE (Buyers)• Coface ATLAS (Buyers)

• ATRADIS (Buyers)• Bankscope (Banks)

• Bankersalmanac (Banks)Selection Criteria

• Quality of Information• Reponses Time


In-House Credit Scoring Model

Buyer Scoring

Flexibly adjustable with data availability

Comprehensive scoring (Qualitative /Quantitative)

Strong Predictable Power

Improved response time

Bank Scoring

Follow Industry Best Practices

Dual Intrinsic and extrinsic rating

framework

Regular reconfiguration in line with the changes

with systemic risk


Claims & Recovery

• Highly Qualified multilingual Legal Calibers

• Claims Management Information System

In-House Claims Management

Unit

• Market Best Practices• Highly responsive

Dynamic Claims Processing Procedures

• Creative Recovery Capabilities • Cumulative recovery ratio

exceeds 55%

Impressive Recovery

Track record


Information Technology

Clients

National ECAs

ICIECManagement

& BODn

Public Access

Premium Invoicing

Credit Limits OnlineOnline Portal

for Policy Management

Buyer/Bank Underwriting

Credit Information

Country Risk

Statistical Reports

Risk Manag. Reports

Exposure Monitoring

KPIs

Reinsurance Support

Technical Support

Underwriting Delegation

Enquir

y•

Web

Acc

ess

•In

form

atio

n

•Pri

cing

•Doc

umen

tati

on

Underwrit-ing


Marketing Mix


Distribution Channels

Local Agents

National ECAs

Brokers

Jeddah Office (HQ)

Dubai Office (DIFC)

Customer

Local SalesRepresentative

IDB Gates( Jakarta, Cairo, Istanbul, Abuja,

Dhaka)

IDB Regional Offices (Kuala Lumpur,

Dakar, Rabat, Almaty)


Jeddah HQAn assortment of 55

Professional and Technical staff members from the

best caliber in credit insurance and banking

sector representing over 13 nationalities from our

member countries


Wider Geographical reach

ICIEC Inaugurates Representative Office in DIFC

ICIEC’s Dubai Representative Office will be a full-fledged provider of ICIEC’s Shariah Compliant Export Credit & Political Risk Insurance products to banks and corporate operating in Dubai and neighboring countries.

The DIFC, being the premier international financial centre in the region, provides an excellent base for ICIEC to be close to its clients, and craft better solutions for their needs.


IDB Regional Offices

Dakar, Senegal • Covers

South and

Middle Africa

Rabat, Morocco • Covers

North Africa

Kuala Lumpur, Malaysia • Covers

South & East

Asia

Almaty, Kazakhst

an• Covers

the CIS countri

es


Local Agents• Due to the limited awareness of ICIEC products in member countries, it was

envisaged to establish a network of Local Agents in order to assure sustainable level of business. This helps in promoting ICIEC services to a larger number of potential clients, including Banks, Exporters and Investors.

• With special focus on Medium Term business, the Corporation identified Aktif Bank in Turkey and Bank Ijara in Malaysia to be its local agents in these target countries.

• Local Agents for other target markets would also be sought. Local Agents will be especially encouraged to assist in (a) selling DCIP, (b) selling FII (c) enhancing the utilization rates of existing customers and (d) introducing new quality customers to ICIEC.


Local Sales Representatives

• Due to its wide market coverage, ICIEC has opted to contract with field representatives in various member countries.

• The role of the Field representative is to represent ICIEC on the ground in dealing with clients, banks , buyers , regulators and stakeholders.

• ICIEC Field Representatives are equipped intensive knowledge of our products and high level of professionalism.

• Currently we are working to appoint FR in KL, Senegal and Egypt.


Brokers• The Corporation established good contacts with major international and local

brokers in UK, France, Turkey, Malaysia and Singapore.

• This channel proved to be an excellent channel especially for medium term insurance. Brokers are already well established in these markets and have a large database of customers.

• They are not only active in arranging credit insurance services but also all other kinds of insurance products. Hence, they are most aware of any new or potential business opportunities from their clients.


Products Mix


ICIEC Product Mix

Banks

Investors

ECAs

Suppliers Cr

edit

Insu

ran

ce

Political Risk

Insurance

Trade Credit

InsuranceR

ein

sura

nce

Foreign Investment Insurance :• Equity Investments

• Non Equity Investments

Inward Reinsurance :

• Quota Share Treaty

• Facultative Reinsurance

• Excess of Loss Treaty

Trade Finance and Investment Insurance• Bank Master Policy

• Documentary Credit Policy

• Loss Payee Assignment for CSTP/STP

• PRI for Financing Facilities

• Non-Honoring of Sovereign Financial Obligations

Export & Domestic Credit Insurance:• Comprehensive Short term Policy

• Specific Transaction Policy

• Supplement Medium term Policy


For Suppliers


Commercial

Risks Covered

Insolvency

of the Buyer/L

C issuing Bank

Failure or refusal of the Buyer/ LC issuing

Bank to pay

Refusal of the buyer to accept

Goods after shipment

Cancellation of the

contract arbitrarily by the buyer

Political Risks

Covere

d

Non Payme

nt caused by War

and civil

disturbance

Non Payme

nt caused

by Curren

cyTransfe

r Restrictions

Non Payme

nt caused

by Expropriation


Comprehensive Short Term Policy (CSTP) Covers exporters against the risk of non-payment by their buyers due to commercial or political reasons. Should the buyer not pay on due date, an insured exporter may revert to ICIEC to be covered.In order to obtain this coverage, the exporter needs to be a CSTP Holder and have its buyers approved for insurance cover. The buyers can be everywhere in the world.The term of coverage for the CSTP within 180 days .

Specific Transaction Policy (STP) V1Is designed to insure single short and medium export transactions, usually associated with project finance. It covers the same risks as the existing Supplemental Medium Term Policy (SMTP) which caters for medium-term whole-turnover business.

Specific Transaction Policy (STP) V2: Contract Frustration

Three products


Comprehensive Short term Insurance Policy (CSTP)

• Covers the commercial and political risks of the whole turnover of the exporterDefinition

• Sharia Compliant Goods & Services• Minimum value added 30% in any member country

• (20% in case of capital goods)Eligibility

• Up to 7 yearsCredit Period

• Exporters, Banks and ECAs domiciled in member countries• Exporters, Banks and ECAs in non member countries that are at least

50% owned by nationals of member countriesBeneficiary

• 90% Claims payable after the waiting period• Up to 10% after recovery

Percentage of Cover


(CSTP) : How does it work?

1. The Exporter will provide ICIEC with a list of his top importers

2. ICIEC will furnish NBI to insure the whole turnover business of the exporter using a flat premium rate for all importers

3. The Exporter concludes an Insurance Contract with ICIEC and pays premium.

4. The Exporter ships the goods to the buyer and declares the shipments to ICIEC on a monthly basis

5. In case the importer fails to pay, the exporter submits a claim to ICIEC, which indemnifies the exporter up to 90% of the contract value.

6. ICIEC recovers from the buyer an returns 10% share to you.

Importer 1

Exporter

ICIEC

Importer 2

Importer 3

1 23

4

6

5


Sample Transaction “ CSTP”

Atradius Re & Lloyds Syndicate

Reinsurers

60% of Risk ceded ProvidesNon-

recourseFinance

Assigns Bank as

Loss Payee

Whole Turnover Insurance Policy;

Covering All Exports

Open Account Exports

Foreign Buyers In• Asia• Africa• Europe• Middle East• North America• Middle East• South America

Client Profile

• Midal Cables is a 100% Export oriented manufacturer of aluminum cables & wires

• ICIEC covers Midal’s entire export portfolio, including buyers in risky countries in Africa & the Middle East

• ICIEC’s intervention has allowed Midal to expand in markets where they would otherwise not have entered

Midal Cables

Financing Bank


Sample Transaction “ CSTP Recovery Case”

Continues to supply Yarn to the importer (Defaulted Buyer) Defaulted Importer

• Tripartite Agreement signed between PH,ICIEC and Buyer

• Expected Recovery period 3-4 years, earlier if buyer’s business improve further

• First Payment of LC Proceeds Nov. 2010

Exporter (Policy Holder)

Defaulted Importer Buyers

Supplies Textiles to its buyers on secured terms

(LCs) , using yarn supplied by the Policy

holder

Assignment of Sales Proceeds

Receives 80% of Sales Proceeds

Receives 20% of Sales Proceeds

Against currently supplied yarn

For partial recovery of O/S debt


Single Transaction Policy (STP)

• Covers the commercial and political risks of single export transaction ( Large Tickets)Definition

• Sharia Compliant Goods & Services• Minimum value added 30% in any member country

• (20% in case of capital goods)Eligibility


• Exporters, Banks and ECAs domiciled in member countries• Exporters, Banks and ECAs in non member countries that are at least

50% owned by nationals of member countriesBeneficiary


Percentage of Cover


(STP) : How does it work?

1. Exporter enters into a Sale Contract with an importer.


3. The Exporter ships the goods to the buyer and declares the shipment to ICIEC within 10 days from the date of shipment).

4. In case the buyer fails to pay, the exporter submits a claim to ICIEC, which indemnifies the exporter up to 90% of the contract value.

5. ICIEC recovers from the buyer an returns 10% share to you.


Supply & Installation of Cables

7 Years Supplier Credit Structure

80% of Risk ceded

Project Finance

Loss Payee

ICIEC enabled the project by providing cover against default on documentary credit of the issuing bank

The financing bank was able to provide 7 years Project Finance facilities to the Exporter

The Exporter was able to offer supplier Credit Facilities of 7 years and have won the project

Opens Letter of CreditInternational

ReinsurersCommercial Bank of

Ethiopia

Ethiopian Electric Power Company

Facilitating Project Finance Insuring Projects awarded to Member Countries Exporters

Single Transaction PolicyCovering Contracts

Business Insured : EUR 75 mil


Electricity Water and Sanitation Authority

- Rwanda

Supply and installation of

electricity network – U

SD 68 m

Ministry of Finance of

Rwanda

Guarantee Payment

Insurance PolicyUSD 51 mil

Inward Facultative Reinsurance Policy USD 17.5 m

Reinsurance

Insuring Projects awarded to Member Countries Exporters

Reinsurance

ICIEC enabled project by helping Tunisian ECA to insure the non payment risk of the buyer .

The Tunisian Exporter was able offer 3 years supplier credit facility and have won the project


Galilah Water Desalination Plant - UAE

Water Desalination

Plant

US/Indian contractor

1. Covered Party – American Contractor2. Cover Against – Non-payment by Federal

Electricity & Water Authority - UAE3. Project Implementation Period - ~ 3 Years4. Percentage of cover – 90%5. ICIEC Covered amount – USD 25 mn6. Status–currently underway

Federal Electricity & Water

Authority(UAE)

USD 25 millionInsurance Cover

Project Owner

EPC Contract

Milestone Payments


Algerian Telecom Transaction

Algeria Telecom

Huawei (China/Algeria)

USD 8 millionInsurance Cover

DSL ServicesDSL Equipment Internet SubscribersInternet

SubscribersInternet SubscribersInternet

SubscribersDSL RevenuesShare of DSL

Revenues

1. Covered Party – Huawei2. Cover Against – Non-payment by Algeria

Telecom of Huawei’s share of revenues from DSL Services Profit Sharing Agreement

3. Contract Duration - ~ 2 Years4. Percentage of cover – 90%5. ICIEC Covered amount – USD 8 mn6. Status–currently underway


Supporting Member Countries to import strategic goods

Bakri International Energy Company Limited

Leading Oil Trader in the MENA

Founded in 1973 and is based in Jeddah, Saudi Arabia.

Fuel Oil Supply Contract

Exp

ort

Cred

itIn

sura

nce Value of Contract: US$ 264 mil

Maximum Credit Limit US$ 144mil

Credit Period 60 days

Percentage of cover: 71%

Risks Covered: •Commercial •Political Reinsurance

70% of the risk


Facilitating Imports of Capital Goods from Non MCsInsuring Muharraq Sewage Treatment Plant - Bahrain

Muharraq SWTP

Ministry of works (Bahrain)

Non Honoring of Financial Sovereign Obligation Insurance Policy

15 years Sovereign Guarantee15 years Financing facility

Bahraini SPV owned by

Build-own-operate contract

Ministry of Finance Bahrain Business Insured :

USD 17 mil

ICIEC has enabled the project by providing long term insurance to the Project Financier against the non payment of the

Member Country Sovereign project sponsor

International Bank

Consortium – Contractor


For Investors


Political Risks

Covered

War and civil disturbance.

CurrencyTransfer

Restrictions

Expropriation Breach of contract

Non Horning of Sovereign

Obligations


Non Equity

Production-sharing

contracts Profit-sharing

contracts

Management contracts

Franchising agreements

Licensing agreements

Turnkey contracts

Operating lease

agreements

Subordinated debentures

Equity

Ownership rights in the assets of an

unincorporated branch

Corporate Guarantee

Loans made to the

enterprise for

investment purposes

Rights to participation in the profits

and liquidation proceeds

Founding Shares

Portfolio as well as direct equity

investments

Eligible Types of Investments


Political Risks insurance For Investors

• The policy provides insurance coverage for cross border equity investment by any individual or company against transfer & convertibility, Expropriation, War and Civil disturbance and breach of contract.

Equity Investment Insurance Policy (EIIP)

• Provides insurance coverage for cross border financing by banks and financial institution against transfer & convertibility, Expropriation and War and Civil disturbance.

Financing Facility Insurance Policy (FFIP)

• Provides insurance coverage against the default of governments and government owned entities in meeting their sovereign obligations

Non Honoring of Sovereign Obligations (NHOSO)


Equity Investment Insurance Policy (EIIP)

• The policy provides insurance coverage for cross border equity investment against political risksDefinition

• Foreign cross border Investments in member countries• New Investments (Not existing)Eligibility


• Equity investors whether individual or company Beneficiary


Percentage of Cover


Political Risk Insurance – How does it Work?

InvestorHost CountryGovernment

1. Investor submits Primary Application, receives in-principle approval; submits Main Application

2. ICIEC assesses project/country risks

3. ICIEC approves insurance, makes offer of insurance to investor

4. ICIEC obtains non-objection of host country government

5. In case of claim event, investors submits claim to ICIEC, which pays compensation

2

54

Project

1 3


Al Dar Al Arabia

Pharmaceutical Manufacturing

Co.Company engages in manufacturing

pharmaceuticals ,exclusively penicillin

owns a 6,000 m2 manufacturing facility. The company was

founded in 2005 and is based in Algeria

Hikma Pharmaceuticals

Multinational pharmaceutical that manufactures branded,

generic and in-licensed pharmaceutical products

It was founded in Jordan in 1978 by Samih Darwazah

Acquirer Target

Policy Type : Equity Investment Insurance Policy (EIIP)Project Value : US$ 45 milInsured amount : US$ 20 millionTenor : 7 years

Risk covered Transfer &

convertibility ,expropriation , war and Civil disturbance and breach of

contract.

Remaining 50%Now Controls 100%

Sample Transaction “Equity Investment Insurance Policy”


Facilitating Intra FDI: Tosyali Steel Investment - Algeria

Steel Mill Algeria

Tosyali Steel - Turkey

Insurance Policy – Euro 75 million

1. Covered Party – Tosyali Steel

2. Cover Against – Transfer Restriction, Expropriation, War & Civil Disturbance,

3. Insurance Duration – 5 Years

4. Percentage of cover – 90%5. Investment Value – Euro 75

million6. Status–currently underway


Financing Facility Insurance Policy (EIIP)

• The policy provides insurance coverage for cross border financing facility against political risksDefinition

• Foreign cross border financing to member countries• Fresh funds (Not existing)Eligibility


• Banks and Financial InstitutionsBeneficiary


Percentage of Cover


Political Risk Insurance – How does it Work?

FinancerHost CountryGovernment

1. Financer submits Primary Application, receives in-principle approval; submits Main Application

2. ICIEC assesses project/country risks

3. ICIEC approves insurance, makes offer of insurance to investor

4. ICIEC obtains non-objection of host country government

5. In case of claim event, investors submits claim to ICIEC, which pays compensation

2

54

Project

1 3


Dakar New International Airport project, Senegal

Dakar airport Project

Government of Senegal

African Corporation

InsuranceEuro 50 mn

100% ownership

1. Covered Party– African Corporation

2. Cover Against – Expropriation, War & Civil Disturbance, Breach of Contract


4. Percentage of cover – 95%

5. Investment Value – Euro 594 million

6. ICIEC Covered amount – Euro 50 million

7. Status–currently underway

Financing Facility

Project Company


Non Honoring of Sovereign Financial Obligations (NHOSO)

• The policy provides insurance coverage against the default of governments and government owned entities in meeting their

sovereign obligationsDefinition

• Financial obligations of Sovereigns from member countries towards foreign companiesEligibility


• Investors and Financial InstitutionsBeneficiary


Percentage of Cover


How does it work?

Provides insurance coverage against the default of governments and government owned entities in meeting their sovereign obligations

Non Honoring of Sovereign Financial Obligations (NHOSO)

1. Bank enters into a cross border finance agreement with Government Owned Enterprise in another member country.

2. The Banks concludes an Insurance Contract with ICIEC and pays premium.

3. In case the Government Entity fails to pay, ICIEC compensates the bank with 90% of the insured finance value.

4. ICIEC recovers from the buyer an returns 10% share to the bank.

GOE

ICIEC

2 3

1Bank


Muharraq Sewage Treatment Plant - Bahrain

Muharraq SWTPMinistry of Finance –Bahrain

Special Purpose Vehicle - Bahrain

International Bank

Insurance PolicyUSD 17 million

Sovereign Guarantee

1. Covered Party – Int. Bank

2. Cover Against – Non-honoring of payment guarantee by the MoF Bahrain

3. Insurance Duration – ~ 20 Years


5. ICIEC Covered amount – USD 17 million


Financing facility

Build-own-operate contract


AlSufouh Tram Project, Dubai- UAE

AlSufouh tram project

Dubai Department of Finance

International Bank

Insurance PolicyUSD 40 mn

1. Covered Party – Int. Bank2. Cover Against – Non-

honoring of payment by Dubai Department of Finance


4. Percentage of cover – 95%5. ICIEC Covered amount –

USD 40 mn6. Status–currently underway

Financing facility

Turn-key contract

Road and Transport Authority

Contractors

payment

ECA support


Istanbul Metro project, Turkey

Istanbul Metro Project

Istanbul Municipality -

Turkey

Banks Syndicate

MIGA – World Bank

(Insurer)

ReinsuranceEuro 15 mn

Guarantee

1. Covered Party– MIGA2. Cover Against – Non-

honoring of payment guarantee by the Istanbul Municipality

3. Insurance Duration – ~ 10 Years


5. Investment Value – Euro 280 million

6. ICIEC Covered amount – Euro 15 million


Insurance Policy – Euro 280 million

Financing Facility


Investor: Fromageries Bel – France

Insurance duration: 4 years

Percentage of cover: 90%

Investment Value: US$22million

Cover: US$16.4million

Risks covered: Transfer Risk, Expropriation, War & Civil Disturbance

Policy Status: Effective since 2008

Bel-Sahar Dairy Project, Iran “Equity Investment Insurance Policy”

Fromageries Bel(France)

Sahar Dairy(Iran)

Joint Venture70%30%

Bel-Sahar Dairy Company, Iran

PRI Cover


MDL Company (Australia)

Catlin, Chubb, AIG Reinsurer Insurers

Investor: MDL, Australia

Financier: Macquarie Bank Limited, Australia

Host country: Senegal

Insurance tenor: 4 years


Risks covered: Expropriation, War & Civil Disturbance, Transfer Restriction

ICIEC Cover: US$22.1 million

Macquarie Bank Limited

(Australia)

PRI Cover

Financing

Sabodala Gold Project, Senegal

Sabodala Gold Project, Senegal “Financing Facility Insurance Policy”


For Banks


For Banks

Bank Master Policy (BMP)

• Provide insurance of banks export related financing to its customers on an Islamic basis against both commercial and political risks

Documentary Credit Insurance Policy (DCIP)• To protect the commercial bank against the risk of non-payment of an Import Letter of

Credit issued by an importer's bank and confirmed by the policyholder on behalf of its exporting customer.

Loss Payee Assignment

• Allowing the banks to provide export related financing to its customers and utilize the export receivables as security for the repayment of the credit extended.

Financing Facility Insurance Policy (FFIP)• Provides insurance coverage for cross border financing by banks and financial

institution against transfer & convertibility, Expropriation and War and Civil disturbance.

Non Honoring of Sovereign Obligations (NHOSO)

• Provides insurance coverage against the default of governments and government owned entities in meeting their sovereign obligations


How does it work?

EXPORTER’S/CONFIRMING

BANK

1. Importer arranges LC issuance2. Issuing bank issues LC to

exporters/confirming bank3. Confirming bank applies to ICIEC

to insure LC4. ICIEC approves, confirming bank

pays premium5. In case of non-payment by issuing

bank, exporters bank submits claim and ICIEC pays compensation (90% of loss)

6. ICIEC recovers arrears from issuing bank, pays back 10% to confirming bank

IMPORTER

IMPORTER’S/ISSUING

BANK

13

2

4 56

To protect the commercial bank against the risk of non-payment of an Import Letter of Credit issued by an importer's bank and confirmed by the policyholder on behalf of its exporting customer.

Documentary Credit Insurance Policy (DCIP)


Tombstone

• Amount: $50 million• ICIEC’s share: $ 20 million• Credit Period: 30 days• Pricing– Pre Agreed 3% p.a applied to the credit risk period.• ICIEC cover –Risks Covered- 90% risk of non- payment of LC

issuing Bank• Settled in May, 2008

Importer in Ethiopia

Importer’s BankCBE

Exporter in Saudi Arabia

DCIP PH NCB- LC confirming Bank

Confirms $30m

Export Contract

30 ,000 MT White Sugar Cane valued at $50.0m

Opens LC Makes Payments

Payment Settled in 30 days

Adds Confirmation to LC

Credit Limit Approval for

$20 m

Cedes 20.0m risk to ICIEC

Lloyds Syndicate Reinsurer

Possibility of Further Ceding the risk

Sample Transaction “ DCIP”


How does it work?

Financing Bank

1. Financing Bank purchase the goods from

the exporter at (P)

2. Financing Bank makes deferred payment

sale of goods to the importer at (P+Mark

up)

3. Financing Bank applied to ICIEC to insure

the Murabaha receivables (P+Mark up)

4. ICIEC approves, financing bank pays

premium

5. In case of non-payment by buyer

(borrower) the bank submits claim and

ICIEC pays compensation (90% of loss)

6. ICIEC recovers arrears from issuing bank,

pays back 10% to confirming bank

Importer

Exporter

3

1

4 5 2

6

• Provide insurance of banks export related financing to its customers on an Islamic basis against both commercial and political risks

Bank Master Policy (BMP)


Sample Transaction “ BMP”

Tombstone

• Amount: $25 million Murabaha Finance Facility• Tenor: 3.5 years• Repayment- 10 quarterly installments , one year grace

period• Pricing– Pre Agreed 3.6% p.a • ICIEC cover –Risks Covered- 90% commercial and non-

commercial risk• Status – Settled June, 2007

NEC in Sudan

Bank of Sudan

Supplier in Dubai

BMP PH DIB

Export Contract

Construction Material & Equipment

Murabaha Finance

Agreement

$25m Credit Limit approval Under BMP

Provides Financing Against ICIEC backed

Guarantee

Unconditional Bank Guarantee


How does it work?

Allowing the banks to provide export related financing to its customers and utilize the export receivables as security for the repayment of the credit extended.

Loss Payee Assignment

1. Exporter enters into a Sale Contract with an importer.


3. The Exporter assigns the finance bank as a loss payee on the policy who has the right to receive the claims.

4. The financing Bank offers the exporter , export finance facilities against assignment of contract proceeds or Bills discounting

5. In case the buyer fails to pay, ICIEC compensates the bank with 90% of the contract value.

6. ICIEC recovers from the buyer an returns 10% share to the bank.

Importer 1

Exporter

ICIEC

Importer 2

Importer 3

2

5

3

1

6 Bank

4


STP – Sample Transaction (i)

Turnkey Project – Electricity Grid

Financing Bank

Assign as Loss Payee

60 mn US$ Insurance Policy

Central Bank Guarantee

Tombstone

• Contract – supply and commissioning of Electricity Grid

• Tenor – 6 years

• Payment terms – equal quarterly installments

• Security – Open Account with Central Bank Guarantee

• ICIEC cover – against default of the buyer or the sovereign guarantee

• Status –currently underway

National Electricity Co.

Sudan

Finance

International Reinsurers

80% of Risk ceded

Exporter


For ECAs


Inward Reinsurance For ECAs

Reinsurance Facilities Agreement (RFA). This product is offered to Export Credit Agencies (ECAs) and commercial insurance companies in Member Countries, The RFA is essentially a facultative reinsurance arrangement that could be developed into a quota-share treaty. Quota Share TreatyIs a proportional reinsurance Treaty offered to ECAs in the member countries, which states taking a stated percent share of their entire portfolio as a support to their insurance capacityExcess of Loss Is non proportional reinsurance designed to help ECAs to underwrite large transactions


101

Sample Transaction: Inward ReinsuranceJanzoor Investment Project (Libya)

Reinsurance Contract

Investor: Libyan General Trading Company Kuwait

Host country: Libya

Insurance tenor: 10 years


Insured amount: US$ 74 million

Risks covered: Expropriation, War & Civil Disturbance, Transfer Restriction, Breach of Contract

ICIEC Cover: US$7.4 million

PRI Cover

Janzour Project (Libya)

http://images.google.com/imgres?imgurl=http://www.iaigc.net/images/logo.gif&imgrefurl=http://www.iaigc.net/&usg=__wFe7329m7cdYiv9xENS19VvmSzY=&h=213&w=407&sz=19&hl=en&start=3&um=1&itbs=1&tbnid=vtsu-1NA9Dk2WM:&tbnh=65&tbnw=125&prev=/images?q=The+Arab+Investment+and+Export+Credit+Guarantee+Corporation+logo&um=1&hl=en&safe=active&sa=N&tbs=isch:1


Sample Transactions: Inward Quota Share

ICIEC

NAIFSudan• ICIEC

share : 60%• BI since

inception: US$ 8.5 m

ECIEUAE

• ICIEC share :15%

• BI since inception: US$ 6.5m



Investment Promotion Technical Assistance Program (ITAP)

ITAP an initiative of the IDB Group, was established in 2005.

Its objective is to help unlock the developmental potential of its 56 Member Countries through a comprehensive and integrated program of foreign direct investment promotion technical assistance.

Its focus areas include institutional development, sharing best practices, and information dissemination on investment opportunities in Member Countries.

We also offer technical assistance…

105 Member of Islamic Development Bank Group105

Guiding Philosophy:

Share the expertise and experience of successful Member Countries with other Member Countries

Promote intra-member country investment – ensure that greater outward flows of FDI from developed IDB MCs end up in developing ones – Country Promotion Programs.

Cooperate strongly with other MDBs and institutions and agencies to maximize synergy and avoid Duplication

Help increase the volume of FDI coming into our Member Countries

ITAP – IDB Group’s Investment Promotion Technical Assistance Program


Needs Assessment Studies

Capacity Building of Investment Promotion Agencies and relevant government institutions

Identification of investment opportunities

Country Promotion events, including seminars and conferences

Policy Advice to improve investment environment

Development of Investment Information Networks on the internet, as well as common software platforms that help in matching investors with projects in Member Countries.

The types of technical assistance provided by the program:

ITAP – IDB Group’s Investment Promotion Technical Assistance Program


Client base


Industry Relations


• The 75th Annual General Meeting of the Berne Union held in Seoul adopted a resolution to accept the Islamic Corporation for the Insurance of Investment & Export Credit (ICIEC), as a permanent member

• Among 50 of top organizations in the world in credit insurance industry, ICIEC is the only Sharia Complaint ECA in the world to have a permanent membership in Berne Union

Permanent Membership in

ICIEC is a Member of the Berne Union since 2009


Requirements to be accepted as a Full Member

Only Export Credit & Political Risk Insurers & Reinsurers are eligible to be members

The company should be at least three years old

Minimum annual premium income > USD 5 million; Business Insured > USD 450 million

Minimum annual premium income from short term ECI > USD 2 million, short-term export credit business insured > USD 225 million

Company should be accepted as a member by a simple majority of Berne Union members in a vote

Berne Union guidelines should be used by the company in conducting its business


Access to large ECA’s and

private sector credit insurers• MOUs signed

with Atradius,

Sace & Turkexim

Access to latest technical

developments in the industry

• Market Best Practices

• Product Development

Access BU intranet (real-

time information sharing tool)

• Risk information• Claim

Expertise

Benefits of joining


Credit Alliance is a worldwide credit risk insurance network that unites 78 partners – mainly banks and insurance companies. Credit Alliance partners apply unified Coface insurance claims management practices and technologies for commercial purposes.

ICIEC is a member since 2000

Credit Alliance


The Berne Union Prague Club is an information exchange network for new and maturing insurers of export credit and investment.

The Prague Club was started in 1993 by the Berne Union with funding from the European Bank for Reconstruction and Development (EBRD).

The Prague Club supports members in developing their export credit and investment insurance schemes and facilities. It provides this support by hosting technical discussions at twice-yearly meetings, as well as by facilitating ad-hoc information exchanges.

Member of The Prague Club since 2001


Credit InformationCentral Database

Capacity Pooling Combined Business Insured of USD 15 billion

Claims & RecoveryCentral Register

Common Code of ConductIndustry Best Practices

Knowledge Sharing Platform

Supporting the Credit Insurance Industry in MCsFounding member in AMAN Union (Since 2009)

Aman Union currently includes 17 ECAs from OIC countries, 4 Associate Members and 8 observers.


Founding member of AMAN Union since 2009

In 9 Dhul Qa’da 1430 H. A charter was passed to establish a union of commercial and non-commercial risks Insurers and Reinsurers in the Islamic & Arab Countries called “AMAN UNION”

Founding members are :9. CAGEX – Algeria10. ECGCE – Egypt11. ASEI – Indonesia12. EGFI- Iran13. JLGC – Jordan14. Daman – Kuwait15. LCI – Lebanon16. Exim Bank –

Malaysia17. SEP - KSA

1. ECGAO – Oman2. ICIEC3. SONAC Senegal4. NAIFE – Sudan5. Sheikan – Sudan6. COTUNACE- Tunisia7. Turk Exim Bank –

Turkey8. ECIE – UAE


(AAOIFI) is an Islamic international autonomous non-for-profit corporate body that prepares accounting, auditing, governance, ethics and Shari'a standards for Islamic financial institutions and the industry.

As an independent international organization, AAOIFI is supported by institutional members (200 members from 45 countries, so far) including central banks, Islamic financial institutions, and other participants from the international Islamic banking and finance industry, worldwide.


(IFSB) is an international standard-setting organization that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets and insurance sectors.

As at March 2011, the 191 members of the IFSB comprise 54 regulatory and supervisory authorities, seven international inter-governmental organizations and 130 market players, professional firms and industry associations operating in 43 jurisdictions.

http://www.ifsb.org/index.php


The General council for Islamic Banks and Financial Institutions

CIBAFI was established for two major roles: support and protect the Islamic Banking industry through awareness and training, holding conferences, seminars and forums and providing the necessary information.

The counsel is established by a royal decree from HE King of Bahrain in 2001 and now serves Islamic Banks in 25 member countries


First created in 1994 as the "Centre for Commercial Conciliation and Arbitration", the current DIAC is an autonomous, permanent, non-profit institution.)

The Centre provides the regional and international business communities with facilities for conducting commercial arbitration, promoting the settlement of disputes by arbitration, as well as developing a pool of arbitrators in the practice of international arbitration.


Claims


Claim Payment Process

Due DatePayment Date

Waiting Period

NPL

Within 30 days

Claim Form Subrogation of rights

100% of Invoice Value

90% of Invoice Value


Recovery Process

100%

Legal

Loss payee10%

Admin.

ICIEC90%

Recovery Proceeds

Incurred Fees

Net Proceeds


Sample Claim Case that emphasis the

unique multilateral edge of ICIEC


Overview of the Transaction

ICIEC has issued two STP Policies to cover the exports of a Egyptian based company (“the Policyholder”), to a State-owned Corporation in Sudan (“the Buyer”):

STP -Euro Policy:

Total amount approved Euro 21 million

Total amount shipped Euro 19,6 million

STP - Dollar Policy:

Total amount approved USD 41 million

Total amount shipped USD 38,8 million


Key Facts of the Claim

• Credit Period: Three years

• Grace period: Two years

• Terms of Payment: open account

• Guarantee: Letter of Comfort from Ministry of Finance


Overview of the Claim Submitted The Policyholder and his loss payee have initially

notified a loss on the two policies:

Euro Policy Euro 12,6 million = USD 18.6 million

Dollar Policy USD 5.4

Total of the Claim USD 24.0 million


Cause of the claim• Organizational restructuring of the Buyer which took a very long time

leading to the delay as .

• during the process of the restructuring, the Buyer couldn’t establish a department to manage the outstanding foreign debts.

• The difficulty of the Buyer to transfer convertible foreign currency from Sudan due to the separation of southern Sudan which led to the loss of 80% of the oil income to the Northern Sudan.

• It was notice that the Buyer has number of contracts which not covered with the Policyholder which was mismanaged and experienced lack of coordination and documentation.


Loss Minimization Efforts • A letter was sent to the new management of the Buyer informing the

involvement of ICIEC in the transaction. • ICIEC CEO met with the Minister of Finance , the Governor of the Central

Bank of Sudan and the new Management of the Buyer and drew their attention to the repercussion of delay in paying the outstanding installments.

• Accordingly, the Buyer agreed to settle the outstanding installments by paying $1 million on weekly basis

• ICIEC encouraged the Policyholder and the loss payee to accept the settlement proposal in order to maintain the relationship between the Policyholder and the Buyer.

• Accordingly, the Buyer succeeded to settle all the dollar installments and a vast portion of the Euro one. The Euro installments are expected to be fully settled by end of November (just two installments left).


Lessons Learned

• The importance of underwrite the so called “acquisition risk” or “privatization risk” of State-owned corporations.

• The need of cooperation between financial institutions as loss payees with insurers especially when they have the right of filing claims.

• The importance of ICIEC – IDB leverage as multilateral institutions towards it member countries.


Business Indicators


Business Franchise

1429 1430 1431 1432

825427

14212040619

602

546

1160

Business Insured

Repeat Business New Business

43 % Banks

57 % Corporates


20072008

20092010

2011

1,399 1,7062,135

3,214 3,364

New Commitments (USD mn)

CAGR 25%

Major Business Indicators


20072008

20092010

2011

1,4691,444

1,029

1,967

3,200

Business Insured (USD mn)


CAGR 21%


20072008

20092010

2011

443 559 743731

1,140

Current Exposure (USD mn)


CAGR 27%


Claims Ratio

2007 2008 2009 2010 2011

5% 5%13%

0% 1%

41%

97%77%

45%50%

130% 79%82%

42%45%

69%

91% 98%

57%57%

ICIEC Atradius Eurler Hermes Coface


Technical Indicators

2007 2008 2009 2010 2011

9.6

13.212.5

16.2815.37

0.5 0.651.6

0 0.11

Premium and fees (USD mn)Claim Paid (USD mn)


Business insured Distribution by Line of Business

20092010

2011

764 17502803

7687

62

190 130335

Short Term Medium Term Investment


Banking30%

Sovereigns & GREs13%

Metals11%

Others10%

Telecommunication7%

Health Care6%

Power & Energy5%

Cables5%

Transportation4%

Papers & Packaging3% Logistics

2%

Chemicals1%

Oil & Gas1%

Portfolio Composition by sector

Top Gross Exposures by Economic Sector


Top 10 countries in terms of Exposure (Q1-1433)

Ethiopia

Algeria

Pakistan

Kuwait

Sudan

Senegal

Indonesia

BangladeshEgypt

Spain0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

Net Exposure Ceded Exposure


1425 1426 1427 1428 1429 1430 1431 1432

2.94

6.6

9.6

13.2

12.5

16.2815.37

0.3 1.94 0.5 0.65 1.6

0 0.11

Premium and fees (USD mn) Claim Paid (USD mn)

Claims & Recovery

1425 1426 1427 1428 1429 1430 1431 1432

41%

45%

43%

47%

46%

51%

50%

50%

Cumulative Recovery Ratio


Claims Ratio

2007 2008 2009 2010 2011

5% 5%13%

0% 1%

41%

97%77%

45%50%

130% 79%82%

42%45%

69%

91% 98%

57%57%

ICIEC Atradius Eurler Hermes Coface


Contact Us

Abdulrahman Taha, PhDCEO

Tel: 966-2-6467545Email :[email protected]

Mahmud Khalid, M.AHead

Foreign Investment Insurance

Tel 966-2-6467590Email :[email protected]

Imad El Fatih, LLPHead

Claims & Recovery


Sayed Shahbaz, CFA ,FRMHead

Medium Term Insurance


Rahmatnor Mohamed, MBAHead

Reinsurance


Iqbal AbdulkaderHead, Underwriting

Short Term Insurance


Yasser Alaki, MBA Head, Sales Division

Short Term Insurance


Khemais Al GazzahDirector, Operations

Tel: 966-2-6467585Email :[email protected]


Thank you

Documents

[PPT]Slide 1 - ICIEC ppt.pptx · Web viewThe types of technical assistance provided by the program: ITAP – IDB Group’s Investment Promotion Technical Assistance Program Client