 "ECGC to look at report to enhance its role in supporting exporters")
Speaking to reporters while announcing the launch of 57th branch of ECGC, she said that one of the recommendations in the draft report is that by looking at the premium claim ratios for the past 5-10 years, there is a scope to reduce the base premium rate.
The recommendation has been that the "ECGC should now rework its pricing and see what benefit can be passed on to the exporter," she added.
The ECGC is worried about the bank portfolio, as there are reports of default and lot of claims in the pipeline.
"I am more worried about the bank outstanding. As far as the exporters receivables are concerned, that is not alarming enough. That is the reason now we are trying to bring down the premium rates for the exporters. We haven't had any big claim situation upsetting our policy portfolio," she said. However, the issues are expected to come to an end perhaps by December, this year and hopefully there might be some green shoots by fourth quarter, she added.
As on March, 2015, there were 12,000 covers were enforced by ECGC including banks and exporters. The company has underwritten risk value of Rs 2,80,190 crore with a maximum liability of Rs 80,000 crore. Out of the total risk value covered, around Rs 1,35,000 crore is the exposure to banks, while the rest is ECGC's support offered to the exporters directly.
The income of ECGC was Rs 1,362 crore. The authorised capital is Rs 5,000 crore and the paid up capital is Rs 1250 crore. Net worth is around Rs 3,000 crore and we have investible funds of about Rs 7,000 crore.
"The report covers how we should review our insurance covers that we issue, how do we do the pricing, is there a scope for reduction in base premiums, should we not rationalise no-claim bonus, should we simplify the claim processing etc," she said.
ECGC will have to put the report to the board in November and if need be, it may have to go to the government and IRDA. "So we dont know whether we may have to go to him. We would like to do this. The private sector competition is picking up. There seems to be competition slowly picking up, the private sector," she added.
She said that the first six months of this year there were no growth even in ECGC. The business of the existing customers seem to be shrinking, despite the fact that fresh policy covers have been issued. She added that with the risk being high in exports in both the developed and emerging countries, there is a growing role for ECGC in exports. The company is working in close co-ordination with the export promotion bodies and the Government to make India realise its target of achieving $900 billion by 2020.
