Export Credit Corp to launch 2 new export insurance schemes

Projects 80% growth in premium collections this year

Export Credit Guarantee Corporation of India Limited (ECGC) Visakhapatnam branch, which comprises four coastal districts of Andhra Pradesh, is slated to introduce two new export insurance schemes.

ECGC's Visakhapatnam branch is projecting a 80 per cent growth in premium collections during the current year.

ECGC's two new policies, which are planned to be introduced shortly for the benefit of the exporter community, are meant for consignment exports (stock holding agent) and consignment export (global entity) policy.

"At present, ECGC is providing insurance cover on issues related to the insolvency of the foreign buyer, willful default by the buyer, insolvency of the Letter of Credit opening bank, willful default by the Letter of Credit opening bank and political instability in the importing country," D V S Sai Ramam, branch manager, ECGC, told Business Standard.

"At present, our premium collections through marine exports are negligible. Every year, more than Rs1,000 crore worth of marine products are being exported from this area without insurance. We want to bring more marine exports to our fold, and the company is going to introduce two new attractive schemes," Ramam said.

It was only last year that ECGC opened its branch at Visakhapatnam and its second ECGC branch in the state of Andhra Pradesh.

During the last fiscal in the September to March quarter the Visakhapatnam branch collected Rs1.62 crore as premium from exporters and settled export claims worth of Rs 1.99 crore. "In the current year, we have targeted a premium collection of Rs 2.90 crore," he revealed.

Marine exporters have of late been reticent in insuring their export cargo because of thin margins and most of the marine exporters have been sending their shipments on a Letter of Credit basis.

"We are educating the marine exporters about the benefits of insurance, and recently ECGC has conducted a meeting between policy holders and bankers at Visakhapatnam to create awareness about the exports insurance," Ramam said.

In the last fiscal ECGC received good business from banks in this area with banks taking export guarantee insurance for its pre-shipment advances and post-shipment advances. Out of the total premium collection of Rs1.62 crore, banks have contributed about Rs 1.40 crore, Ramam pointed out.