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Member of Islamic Development Bank Group
TABLE OF CONTENTS
Our Parent: IDB Group
ICIEC : Who we are?
ICIEC : Organizational Capabilities
ICIEC : Business Model
ICIEC : Operational Support Mix
ICIEC : Marketing Mix
ICIEC: Product Mix
ICIEC: ITAP
ICIEC: Track Record
ICIEC: Industry Relations
ICIEC: Business Indicators
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Member of Islamic Development Bank Group
Affiliated Institution
Islamic Corporation for
Insurance of Investments
and Export Credits (ICIEC)
International Islamic
Trade Finance Corporation
(ITFC)
)
Islamic Research and
Training Institute (IRTI)
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Member of Islamic Development Bank Group
Islamic Corporation for
the Development of the
Private Sector (ICD)
AAA rating
(S&P, Fitch & Moody’s)
ISLAMIC DEVELOPMENT
BANK GROUP
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Member of Islamic Development Bank Group
Islamic Development Bank (IDB)
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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
Member of Islamic Development Bank Group
IDB: Six Priority Areas
 Human Development
 Agriculture Development and Food Security
 Infrastructure Development
 Intra-trade Among Member Countries
 Private Sector Development
 Research and Development in Islamic
Economics, Banking and Finance
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Member of Islamic Development Bank Group
IDB Current Areas of Intervention
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Financing of
Projects (Public
and Private)
Developing the
Islamic Financial
Industry
Trade Financing
and Promotion
of Cooperation
Agriculture
Infrastructure
Industry
Education
Health
SMEs,
microfinancing
Other sectors
 Equity
participation in
Islamic financial
institutions
Developing
Regulatory
framework
Research and
training
Financing imports
Financing exports
Promoting trade
cooperation
Member of Islamic Development Bank Group
Capacity Building
Disseminating of skills
(exchange of experts,
training, etc.)
Supporting civil
societies through NGOs
Supporting womenin-development
initiatives
IDB Current Areas of Intervention (Cont’d)
Risk
Insurance
 Country risk
 Short- and
medium-term
commercial risks
 Coverage of
banks for Islamic
financing products
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Research and
Training
 Islamic banking
and finance
Islamic
economics
Training in
related fields
Member of Islamic Development Bank Group
Asset
Management
 Awqaf assets
Investment
portfolios
Equity funds
Venture capital
funds
Special Assistance
and Scholarships
 Support to Muslim
minorities in non-MCs
Alleviation of natural
disasters
Scholarships for Muslim
communities in non-MCs.
Merit Scholarship
Programs
Growth In IDB membership
Europe: 2
Latin America: 1
Asia: 26
Africa: 27
• A Unique Model of South-South Cooperation
• 56 members spreading over 4 continents
• 22 countries in 1975 → 56 countries in 2009
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Member of Islamic Development Bank Group
Major Shareholders of IDB
Shareholding Stake (%)
17%
5%
7%
24%
9%
7%
7%
10
8%
8%
Member of Islamic Development Bank Group
8%
Saudi Arabia
Libya
Iran
Nigeria
U.A.E.
Qatar
Egypt
Turkey
Kuwait
Islamic Research & Training Institute
•
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
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Member of Islamic Development Bank Group
Islamic Corporation for the Development
of the Private Sector (ICD)
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o
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o
Established in 1999 & commenced its operation in July 2000
Mandated to promote private sector development and to offer
advisory services to the private sector entities in member
countries.
An authorized capital of US$ 2 billion, paid up capital of US$
470 million.
47 Islamic Countries are members of which 21 are in Africa.
Capital Structure (50% IDB, 30% MCs, 20% Financial
Institutions).
As of December 2009, cumulative business :
- Approvals : 185 Projects amounting to US$ 1.59 billion
- in more than 32 member countries
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Member of Islamic Development Bank Group
International Islamic Trade Financing
Corporation (ITFC)
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•
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
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Member of Islamic Development Bank Group
Aa3 rating
(Moody’s)
THE ISLAMIC CORPORATION FOR THE INSURANCE
OF INVESTMENT AND EXPORT CREDIT
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Member of Islamic Development Bank Group
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IFSR Aa3
•
Credit Alliance
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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
Member of Islamic Development Bank Group
ICIEC Member Countries
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Member of Islamic Development Bank Group
ICIEC Major Shareholders
Pakistan, 1.7%
Others, 19.88%
Turkey, 1.7%
Yemen, 1.7%
Kuwait, 1.7%
Egypt, 1.7%
Malaysia, 1.85%
Morocco, 3.37%
KSA, 9.11%
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Member of Islamic Development Bank Group
IDB, 67.46%
ICIEC Milestones …
1415
1416
1419
• Establishment of ICIEC
• Authorized Capital ±
US$ 153 mil
• Commencement of
Export Credit Insurance
Operations
• Commencement of
Investment Insurance
operations
1426
1428
1429
• Establishment of ITAP
• Assigned Aa3 rating by
Moody's
• Authorized Capital
increased to ± US$ 230
mil
1430
1431
1433
• Full membership in
Berne Union
• Founding AMAN union
• Operating Dubai Rep.
Office
• Authorized Capital
increased to ± US$ 615
mil
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Member of Islamic Development Bank Group
ICIEC Milestones …
1994
1995
1998
• Establishment of ICIEC
• Authorized Capital ±
US$ 153 mil
• Commencement of
Export Credit Insurance
Operations
• Commencement of
Investment Insurance
operations
2005
2007
2008
• Establishment of ITAP
• Assigned Aa3 rating by
Moody's
• Authorized Capital
increased to ± US$ 230
mil
2009
2010
2012
• Full membership in
Berne Union
• Founding AMAN union
• Operating Dubai Rep.
Office
• Authorized Capital
increased to ± US$ 615
mil
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Member of Islamic Development Bank Group
ICIEC Rating
IFSR Aa3
ICIEC was first rated Aa3 in 2007 and has maintained the same rating for 5 consecutive
years with stable outlook
• 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.
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Member of Islamic Development Bank Group
Organizational
Capabilities
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Member of Islamic Development Bank Group
ICIEC Governance Structure
Board Of Governors
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
Group Internal Audit

Group Risk Mgmt

Group Strategic
Planning

Group Ombudsman

Group Integrity
Member of Islamic Development Bank Group
Board of
Directors
Sharia Board
Chairman
Advisory Committee
CEO
ICIEC Organization Structure
CEO
Promotion &
Int’l relations unit
Legal Affairs
Short Term
Insurance
Medium Term &
Investment
Insurance
Risk Management
Accounting & Finance
Sales Division
Medium Term
Insurance Division
Regulatory &
Monitoring Division
Accounting & Finance
Division
HRM Services
Underwriting
Division
Investment
Insurance Division
Country Risk
Analysis Division
Treasury Division
Administrative
Services
Credit Information
Division
Dubai Representative
Office
Claims & Recovery
Division
Reinsurance Division
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HRM Corporate
Services
Member of Islamic Development Bank Group
Information
Technology
ICIEC Corporate Governance Structure
Board of
Governors
Board of
Directors
Chairman of the
Board of
Directors
CEO
Minister of
Finance /Central
Bank Governor
Representing 40
Member
Countries
Advisory
Committee
Group
Management
Committee
ICIEC
Management
Committee
Shariah
Committee
Group Internal
Audit Dept.
Group Risk Mgmt
Dept.
Group Strategic
Planning Dept.
Group
Ombudsman
Group Integrity
Officer
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Member of Islamic Development Bank Group
Underwriting
Committee
Claims Committee
Investment
Committee
Risk Management
Functions
ICIEC Board of Governors
Afghanistan
Minister of
Finance
Chad
Minister of
Economy
Jordan
Union of Comoros
Minister of
Finance
Kazakhstan
Minister of
Economy
Cote d'Ivoire
Minister of
Planning &
Dev.
Kuwait
Minister of
Finance
Djibouti
Minister of
Economy
Kyrgyz
DCH Invest.
Agency
Minister of
Econ. Dev.
Lebanon
S. Minister
Prospective
Dev. &
Evaluation of
Egypt
Gabon
Minister of
Economy
Libya
Public Action
Guinea
Minister of
Economy
Malaysia
Prime Minister
Guinea Bissau
Minister of
Finance
Maldives
Minister of
Finance
Mali
Minister of
Economy
Albania
D. Minister of
Finance
Algeria
Minister of
Finance
Azerbaijan
Bahrain
Benin
Darussalam
Min. of Econ.
Dev.
Minister of
Finance
Prime
Minister
Burkina
Faso
Minister of
Economy
Iran
Minister of
Finance
Cameroon
Minister of
Economy
Iraq
Governor
Central bank
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Member of Islamic Development Bank Group
Mauritania
Governor
Central bank
Prime Minister
Secretary for
Plan. & Fin.
Minister of Econ.
Aff. & Dev.
IDB Board of Governors (Cont’d)
Morocco
Minister of
Economy
Sierra Leone
Minister of
Finance
Uganda
Minister of
Finance
Mozambique
Minister of
Finance
Somalia
Minister of
Finance
UAE
Minister of
Finance
Niger
Minister of
Economy
Sudan
Minister of
Finance
Oman
Minister of
Finance
Suriname
Pakistan
Minister of Econ.
Affairs
Palestine
IDB Unit,
Palestinian
Economic Board
for Dev. & Recon.
Qatar
Saudi Arabia
Senegal
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Minister of
Economy
Minister of
Finance
Minister of Int’l
Coop.
Syria
Tajikistan
Governor Central
Bank
Minister of
Finance
CH of the
Committee of
Invest. & Prop.
Mgmt.
Togo
Minister of Coop. ,
Dev, & Land Mgmt
Tunisia
Minister of Dev. &
Int’l Coop.
Turkey
Undersecretary
of Treasury
Member of Islamic Development Bank Group
Turkmenistan
Chairman of the
Board of Foreign
Economic Affairs
Uzbekistan
Minister of
Foreign Econ.
Relations,
Invest. &Trade
Yemen
D. Prime
Minister
Nigeria
Minister of
Finance
ICIEC Management
Chairman of the Board
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
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Member of Islamic Development Bank Group
ICIEC Management
Chief Executive Officer
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.
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Member of Islamic Development Bank Group
ICIEC Management
Director of Operations
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.
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Member of Islamic Development Bank Group
Business Model
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Member of Islamic Development Bank Group
Main Services Provided
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Export Credit
Insurance
Investment
Insurance
Import Credit
Insurance
Domestic Credit
Insurance
Member of Islamic Development Bank Group
ICIEC Mandate …
Export Credit Insurance
Investment Insurance
To encourage exports from
Member Countries to the rest of
the World
To encourage the flow of
capital and investments
from the World
to Member Countries
Member
Member
Countries
Countries
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Member of Islamic Development Bank Group
ICIEC Takaful Model
Capital Subscriptions
Investment Returns
Shareholders Fund
Wakala Fee
Insurance
Management
Premiums
Deficit
Financing
Recoveries
Surplus from Operations
Investment Returns
Policyholders Fund
Profit share ( Shareholders
Investment Returns)
Claims
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Surplus
Member of Islamic Development Bank Group
Surplus
Reserves
ICIEC Takaful Model
Policy Holders Fund
Shareholders fund
• Insurance contributions
• Fees and Expenses of
insurance operations
• Paid-up capital
• Associated reserves.
Risk
Sharing not
Transfer
Win-Win
Proposition
• Cooperative
Insurance not
Hedging
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Member of Islamic Development Bank Group
• Surplus
Sharing
Actuarial
Justness
• Transparent
Platform
• Subscription
based
Business Strategy
Increase Business
Volume
Maximize Developmental
Impact
Maintain Strong
Financial Health
To achieve Portfolio
Diversification
Trade Facilitation
• Promote MC Exports
• Support MCs’ requirements of Food
Security & Capital Goods
Prudent Underwriting
(Low Loss Ratio )
Risk Sharing through
Reinsurance
Reach the Critical Mass in
Business Turnover
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
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Member of Islamic Development Bank Group
Maintain Strong Risk Rating
Capital Preservation
(Conservative Investment
Policy)
Achieve Sustainable
Positive Technical Results
Underwriting Approach
Strong In-house
Underwriting
Develop a local operational
risk management expertise in
Trade Finance, Project Finance
and Political Risk Insurance
Efficiency Capacity
Utilization
More Appetite to ST insurance
Target markets that achieve
more diversification to
business portfolio
ICIEC’s Multilateral
Edge
Leverage ICIEC’s strong
relations with MCs
(governments & central
banks) to mitigate
transactions risks
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Member of Islamic Development Bank Group
Unique Field Expertise
Staying close the domicile of
risk
Maximize local knowledge
Redefine common risk
misperceptions in the
insurance market
Strategic Industrial
Alliances and
Partnerships
With Reinsures, Brokers,
Financers, ECAs to exchange
knowledge & Cede risk
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
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Member of Islamic Development Bank Group
Resources Mobilization Capabilities
• Strong IFS rating (Aa3)
• Strong international network of alliances &
reinsurance providers
Financial Flexibility
• Underlying capital support from member countries
especially GCC countries (A+)
Affiliation with IDB (Aaa)
• Managerial synergies
• Financial Support
Operational Support Mix
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Member of Islamic Development Bank Group
Risk Management Documentation
Articles of Agreement
- Limits of max contingent liability
- Eligibility Criteria
Approved by the BOD
Risk Management Framework
Approved by the BOD
Provides overall framework for risk management
Operational regulations, Investment Guidelines
Approved by the BOD
Acceptable asset classes and exposure
limits. TOR of Investment Committee
IDB GRMD Risk Management
Guidelines
Operational Procedures
Approved by the President
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Member of Islamic Development Bank Group
Guides the staff in managing day to day issues in
underwriting operations.
Country Risk Analysis
Own In-house
Quantitative Model
NACE Sector
Classification
Country Grading
range
(A to G)
Comparable with
the market : Coface
& EIU
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Member of Islamic Development Bank Group
Reinsurance
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Facultative
Treaty
• Specified insurance policy
• Partners include: Zurich,
Starr, Dhaman & ACE Europe
• Percentage ceded :80%
• Covers all the insurance
policies coming within the
scope of the contract
• Partners since 2004 :
Atradius Re & Caltin
• Percentage ceded :60%
Member of Islamic Development Bank Group
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
Year of Agreement
04/05
05/06
06/07
07/08
08/09
09/10
ICIEC’s Retention
75%
70%
40%
40%
40%
40%
Atradius Retention
20%
24%
39%
39%
39%
39%
Catlin Retention
5%
6%
21%
21%
21%
21%
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%
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Member of Islamic Development Bank Group
Key Reinsurers Rating
Quota Share
Business
Facultative
Business
Atradius Re
A- (S&P)
Catlin UK
A (Strong, S&P)
A (Excellent, A.M Best
-ACE Bermuda
AA (S&P)
Zurich UK
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
Fitch: A+ (strong) stable outlook
A.M Best: A (Excellent) stable outlook
S&P: A+ (strong) stable outlook
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Member of Islamic Development Bank Group
Credit Information
Categories of Service Rendered
• Credit Opinion
• Credit Monitoring
• Credit Reports
Approved Information Providers
•
•
•
•
•
•
•
RIME Business Information
Creditsafe
SACE
Coface ATLAS
ATRADIS
Bankscope
Bankersalmanac
(Buyers)
(Buyers)
(Buyers)
(Buyers)
(Buyers)
(Banks)
(Banks)
Selection Criteria
• Quality of Information
• Reponses Time
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Member of Islamic Development Bank Group
In-House Credit Scoring Model
Buyer Scoring
Flexibly adjustable with
data availability
Comprehensive scoring
(Qualitative /Quantitative)
Strong Predictable Power
Improved response time
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Member of Islamic Development Bank Group
Bank Scoring
Follow Industry Best
Practices
Dual Intrinsic and extrinsic
rating framework
Regular reconfiguration in
line with the changes with
systemic risk
Claims & Recovery
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In-House Claims
Management
Unit
• Highly Qualified multilingual Legal
Calibers
• Claims Management Information
System
Dynamic Claims
Processing
Procedures
• Market Best Practices
• Highly responsive
Impressive
Recovery Track
record
• Creative Recovery Capabilities
• Cumulative recovery ratio exceeds 55%
Member of Islamic Development Bank Group
Information Technology
Public Access
Clients
Credit Limits Online
Premium Invoicing
Online Portal
for Policy
Management
Buyer/Bank Underwriting
Statistical Reports
Underwriting
Credit Information
Risk Manag. Reports
Exposure Monitoring
Country Risk
KPIs
Technical
Support
Reinsurance
Support
Underwriting
Delegation
National ECAs
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Member of Islamic Development Bank Group
ICIEC
Management
& BOD
n
Marketing Mix
48
Member of Islamic Development Bank Group
Distribution Channels
Jeddah Office
(HQ)
Dubai Office
(DIFC)
IDB Regional
Offices (KualaLumpur,
Dakar,Rabat,Almaty)
IDB Gates
(Jakarta,Cairo,Istanbul,Abuja,
Dhaka)
Customer
Local
Agents
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Local Sales
Representative
Member of Islamic Development Bank Group
Brokers
National
ECAs
Jeddah HQ
An 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
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Member of Islamic Development Bank Group
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.
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Member of Islamic Development Bank Group
IDB Regional Offices
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Dakar,
Senegal
Rabat,
Morocco
• Covers South
and Middle
Africa
• Covers North
Africa
Member of Islamic Development Bank Group
Kuala
Lumpur,
Malaysia
• Covers South
& East Asia
Almaty,
Kazakhstan
• Covers the CIS
countries
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.
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Member of Islamic Development Bank Group
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.
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Member of Islamic Development Bank Group
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.
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Member of Islamic Development Bank Group
Products Mix
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Member of Islamic Development Bank Group
ICIEC Product Mix
• Comprehensive Short term Policy
• Specific Transaction Policy
•Supplement Medium term Policy
Banks
Credit
Insurance
Export & Domestic Credit Insurance:
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
Suppliers
Insurance
Inward Reinsurance :
•Quota Share Treaty
•Facultative Reinsurance
•Excess of Loss Treaty
Political Risk
Reinsurance
Trade Credit
ECAs
57
Member of Islamic Development Bank Group
Insurance
Investors
Foreign Investment Insurance :
• Equity Investments
•Non Equity Investments
For Suppliers
58
Member of Islamic Development Bank Group
Insolvency
of the
Buyer/LC
issuing Bank
Non Payment
caused by War
and civil
disturbance
Political
Risks
Covered
Non Payment
caused by
Expropriation
59
Cancellation
of the
contract
arbitrarily
by the buyer
Non Payment
caused by
Currency
Transfer
Restrictions
Member of Islamic Development Bank Group
Commercial
Risks
Covered
Refusal of
the buyer
to accept
Goods after
shipment
Failure or
refusal of
the Buyer/ LC
issuing Bank
to pay
Three products
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) V1
Is 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 wholeturnover business.
Specific Transaction Policy (STP) V2:
Contract Frustration
60
Member of Islamic Development Bank Group
Comprehensive Short term Insurance Policy (CSTP)
Definition
• Covers the commercial and political risks of the whole turnover
of the exporter
Eligibility
• Sharia Compliant Goods & Services
• Minimum value added 30% in any member country
• (20% in case of capital goods)
Credit Period
Beneficiary
Percentage of
Cover
61
• Up to 7 years
• 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 countries
• 90% Claims payable after the waiting period
• Up to 10% after recovery
Member of Islamic Development Bank Group
(CSTP) : How does it work?
Importer 1
Exporter
4
Importer 2
Importer 3
1 3
2 5
6
ICIEC
62
Member of Islamic Development Bank Group
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.
Sample Transaction “ CSTP”
Open Account Exports
Whole Turnover
Insurance Policy;
Covering
All Exports
60% of Risk ceded
Atradius Re &
Lloyds Syndicate
Reinsurers
Midal Cables
Assigns
Bank as
Loss Payee
Provides
Nonrecourse
Finance
Financing Bank
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
63
Member of Islamic Development Bank Group
Sample Transaction “ CSTP Recovery Case”
Continues to supply Yarn to the importer (Defaulted Buyer)
Defaulted
Importer
Assignment of Sales Proceeds
Exporter
(Policy Holder)
Receives 80% of Sales Proceeds
Against currently supplied yarn
Supplies Textiles to its
buyers on secured terms
(LCs) , using yarn
supplied by the Policy
holder
Receives 20% of Sales Proceeds
For partial recovery of O/S debt
• 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
64
Member of Islamic Development Bank Group
Defaulted
Importer Buyers
Single Transaction Policy (STP)
Definition
• Covers the commercial and political risks of single export
transaction ( Large Tickets)
Eligibility
• Sharia Compliant Goods & Services
• Minimum value added 30% in any member country
• (20% in case of capital goods)
Credit Period
Beneficiary
Percentage of
Cover
65
• Up to 7 years
• 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 countries
• 90% Claims payable after the waiting period
• Up to 10% after recovery
Member of Islamic Development Bank Group
(STP) : How does it work?
1. Exporter enters into a Sale Contract
with an importer.
2. The Exporter concludes an Insurance
Contract with ICIEC and pays
premium.
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.
66
Member of Islamic Development Bank Group
Facilitating Project Finance
Insuring Projects awarded to Member Countries Exporters
Single Transaction Policy
Covering Contracts
80% of Risk ceded
Loss Payee
International
Reinsurers
67
Member of Islamic Development Bank Group
Supply & Installation of Cables
7 Years Supplier Credit Structure
Ethiopian Electric
Power Company
Project
Finance
Opens Letter of Credit
Commercial Bank of
Ethiopia
Insuring Projects awarded to Member
Countries Exporters
Inward Facultative Reinsurance
Policy USD 17.5 m
Insurance Policy
USD 51 mil
Guarantee
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
68
Member of Islamic Development Bank Group
Ministry of
Finance of
Rwanda
Payment
Electricity Water
and Sanitation
Authority - Rwanda
Galilah Water Desalination Plant - UAE
Milestone
Payments
US/Indian
contractor
USD 25 million
Insurance Cover
69
EPC Contract
Water
Desalination
Plant
Project
Owner
Federal Electricity
& Water
Authority
1. Covered Party – American Contractor
2. Cover Against – Non-payment by Federal
Electricity & Water Authority - UAE
3. Project Implementation Period - ~ 3 Years
4. Percentage of cover – 90%
5. ICIEC Covered amount – USD 25 mn
6. Status–currently underway
Member of Islamic Development Bank Group
(UAE)
Algerian Telecom Transaction
Huawei
(China/Algeria
)
USD 8 million
Insurance Cover
70
DSL Equipment
Share of DSL
Revenues
Algeria
Telecom
DSL Services
DSL Revenues
Internet
Internet
Subscribers
Internet
Subscribers
Internet
Subscribers
Subscribers
1. Covered Party – Huawei
2. Cover Against – Non-payment by Algeria
Telecom of Huawei’s share of revenues from
DSL Services Profit Sharing Agreement
3. Contract Duration - ~ 2 Years
4. Percentage of cover – 90%
5. ICIEC Covered amount – USD 8 mn
6. Status–currently underway
Member of Islamic Development Bank Group
Supporting Member Countries to import
strategic goods
Bakri International Energy Company
Limited
Leading Oil Trader in the
MENA
Export Credit
Insurance
Founded in 1973 and is based
in Jeddah, Saudi Arabia.
Reinsurance
70% of the risk
71
Member of Islamic Development Bank Group
Fuel Oil Supply
Contract
Value of Contract:
US$ 264 mil
Maximum Credit Limit
US$ 144mil
Credit Period
60 days
Percentage of cover:
71%
Risks Covered:
•Commercial
•Political
Facilitating Imports of Capital Goods from Non MCs
Insuring Muharraq Sewage Treatment Plant - Bahrain
International Bank
15 years Financing facility
Muharraq SWTP
Non Honoring of Financial Sovereign
Obligation Insurance Policy
15 years Sovereign
Guarantee
Bahraini SPV
owned by
Build-own-operate contract
Ministry of works
(Bahrain)
72
Member of Islamic Development Bank Group
Ministry of Finance
Bahrain
Consortium – Contractor
For Investors
73
Member of Islamic Development Bank Group
War and civil
disturbance.
Non Horning of
Sovereign
Obligations
Political
Risks
Covered
Breach of
contract
74
Member of Islamic Development Bank Group
Currency
Transfer
Restrictions
Expropriation
Eligible Types of Investments
Subordinated
debentures
Operating
lease
agreements
Productionsharing
contracts
Non
Equity
Profitsharing
contracts
Portfolio as
well as
direct
equity
investments
Ownership
rights in the
assets of an
unincorporate
d branch
Corporate
Guarantee
Equity
Management
contracts
Founding
Shares
Turnkey
contracts
Franchising
agreements
Licensing
agreements
75
Member of Islamic Development Bank Group
Rights to
participation
in the profits
and
liquidation
proceeds
Loans made to
the enterprise
for investment
purposes
Political Risks insurance For Investors
Equity Investment Insurance Policy (EIIP)
• 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.
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
76
Member of Islamic Development Bank Group
Equity Investment Insurance Policy (EIIP)
Definition
• The policy provides insurance coverage for cross
border equity investment against political risks
Eligibility
• Foreign cross border Investments in member countries
• New Investments (Not existing)
Credit Period
Beneficiary
Percentage of
Cover
77
• Up to 20 years
• Equity investors whether individual or company
• 90% Claims payable after the waiting period
• Up to 10% after recovery
Member of Islamic Development Bank Group
Political Risk Insurance – How does it Work?
Host Country
Government
Investor
1
3
5
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
4
2
78
1.
Project
Member of Islamic Development Bank Group
Sample Transaction “Equity Investment Insurance Policy”
Remaining 50%
Now Controls 100%
Hikma
Pharmaceuticals
79
Al Dar Al Arabia
Pharmaceutical Manufacturing Co.
Multinational pharmaceutical that
manufactures branded, generic and
in-licensed pharmaceutical
products
Company engages in
manufacturing pharmaceuticals
,exclusively penicillin
It was founded in Jordan in 1978
by Samih Darwazah
owns a 6,000 m2 manufacturing
facility. The company was founded
in 2005 and is based in Algeria
Policy Type : Equity Investment
Insurance Policy (EIIP)
Project Value : US$ 45 mil
Insured amount : US$ 20 million
Tenor : 7 years
Risk covered
Transfer & convertibility
,expropriation , war and Civil
disturbance and breach of contract.
Member of Islamic Development Bank Group
Facilitating Intra FDI: Tosyali Steel Investment - Algeria
Tosyali Steel Turkey
Insurance Policy –
Euro 75 million
Steel Mill
Algeria
80
Member of Islamic Development Bank Group
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
million
6. Status–currently underway
Financing Facility Insurance Policy (EIIP)
Definition
• The policy provides insurance coverage for cross border
financing facility against political risks
Eligibility
• Foreign cross border financing to member countries
• Fresh funds (Not existing)
Credit Period
Beneficiary
Percentage of
Cover
81
• Up to 20 years
• Banks and Financial Institutions
• 90% Claims payable after the waiting period
• Up to 10% after recovery
Member of Islamic Development Bank Group
Political Risk Insurance – How does it Work?
Host Country
Government
Financer
1
3
5
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
4
2
82
1.
Project
Member of Islamic Development Bank Group
Dakar New International Airport project, Senegal
African
Corporation
Insurance
Euro 50 mn
Financing Facility
Project
Company
100% ownership
Government
of Senegal
Dakar
airport
Project
83
Member of Islamic Development Bank Group
1. Covered Party– African
Corporation
2. Cover
Against
–
Expropriation, War &
Civil Disturbance, Breach
of Contract
3. Insurance Duration – 15
Years
4. Percentage of cover –
95%
5. Investment Value – Euro
594 million
6. ICIEC Covered amount –
Euro 50 million
7. Status–currently
underway
Non Honoring of Sovereign Financial Obligations (NHOSO)
Definition
Eligibility
Credit Period
Beneficiary
Percentage of
Cover
84
• The policy provides insurance coverage against the default of
governments and government owned entities in meeting their
sovereign obligations
• Financial obligations of Sovereigns from member countries
towards foreign companies
• Up to 20 years
• Investors and Financial Institutions
• 90% Claims payable after the waiting period
• Up to 10% after recovery
Member of Islamic Development Bank Group
Non Honoring of Sovereign Financial Obligations (NHOSO)
Provides insurance coverage against the default of governments and government
owned entities in meeting their sovereign obligations
1.
1
2
GOE
3
ICIEC
85
Member of Islamic Development Bank Group
2.
3.
4.
Bank enters into a cross border
finance agreement with
Government Owned Enterprise
in another member country.
The Banks concludes an
Insurance Contract with ICIEC
and pays premium.
In case the Government Entity
fails to pay, ICIEC compensates
the bank with 90% of the
insured finance value.
ICIEC recovers from the buyer
an returns 10% share to the
bank.
Muharraq Sewage Treatment Plant - Bahrain
International
Bank
Insurance Policy
USD 17 million
Financing facility
Special Purpose
Vehicle Bahrain
Build-own-operate contract
Muharraq SWTP
86
Sovereign Guarantee
Member of Islamic Development Bank Group
Ministry of
Finance –
Bahrain
1. Covered Party – Int.
Bank
2. Cover Against – Nonhonoring of payment
guarantee by the MoF
Bahrain
3. Insurance Duration – ~
20 Years
4. Percentage of cover –
95%
5. ICIEC Covered amount
– USD 17 million
6. Status–currently
underway
AlSufouh Tram Project, Dubai- UAE
International
Bank
Insurance Policy
USD 40 mn
Financing facility
Dubai
Department
of Finance
Road and
Transport
Authority
Contractors
ECA support
Turn-key contract
AlSufouh tram
project
87
Member of Islamic Development Bank Group
1. Covered Party – Int. Bank
2. Cover Against – Nonhonoring of payment by
Dubai Department of
Finance
3. Insurance Duration – 5
Years
4. Percentage of cover – 95%
5. ICIEC Covered amount –
USD 40 mn
6. Status–currently
underway
Istanbul Metro project, Turkey
MIGA – World
Bank
(Insurer)
Reinsurance
Euro 15 mn
Insurance Policy –
Euro 280 million
Banks Syndicate
Financing Facility
Istanbul Metro
Project
88
Guarantee
Member of Islamic Development Bank Group
Istanbul
Municipality Turkey
1. Covered Party– MIGA
2. Cover Against – Nonhonoring of payment
guarantee
by
the
Istanbul Municipality
3. Insurance Duration – ~
10 Years
4. Percentage of cover –
95%
5. Investment Value –
Euro 280 million
6. ICIEC Covered amount
– Euro 15 million
7. Status–currently
underway
Bel-Sahar Dairy Project, Iran “Equity Investment Insurance Policy”
PRI Cover
Investor: Fromageries Bel – France
Insurance duration: 4 years
Sahar Dairy
(Iran)
Fromageries Bel
(France)
30%
70%
Joint Venture
Bel-Sahar Dairy Company, Iran
89
Member of Islamic Development Bank Group
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
Sabodala Gold Project, Senegal “Financing Facility Insurance Policy”
Insurers
Catlin, Chubb, AIG
Reinsurer
PRI Cover
Macquarie Bank Limited
(Australia)
Financing
MDL Company (Australia)
 Investor: MDL, Australia
Financier: Macquarie Bank Limited,
Australia
 Host country: Senegal
 Insurance tenor: 4 years
 Investment Value: US$175million
Risks covered: Expropriation, War & Civil
Disturbance, Transfer Restriction
Sabodala Gold Project,
Senegal
90
Member of Islamic Development Bank Group
 ICIEC Cover: US$22.1 million
For Banks
91
Member of Islamic Development Bank Group
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
92
Member of Islamic Development Bank Group
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.
1. Importer arranges LC issuance
2. Issuing
bank
issues
LC
to
exporters/confirming bank
3. Confirming bank applies to ICIEC
EXPORTER’S/
CONFIRMING
BANK
2
IMPORTER’S/
ISSUING
BANK
to insure LC
4. ICIEC approves, confirming bank
pays premium
6
3
4
5
5. In case of non-payment by issuing
1
bank,
exporters
bank
submits
claim
and
ICIEC
pays
compensation (90% of loss)
IMPORTER
6. ICIEC
recovers
Member of Islamic Development Bank Group
from
issuing bank, pays back 10% to
confirming bank
93
arrears
30 ,000 MT White Sugar Cane
valued at $50.0m
Export Contract
Importer in Ethiopia
Opens LC
Importer’s Bank
CBE
Makes
Payments
Payment Settled in 30 days
Adds Confirmation to LC
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
94
Exporter in Saudi Arabia
Member of Islamic Development Bank Group
DCIP PH
NCB- LC confirming Bank
Confirms $30m
Credit Limit
Approval for
$20 m
Cedes 20.0m
risk to ICIEC
Possibility of Further
Ceding the risk
Lloyds Syndicate
Reinsurer
Bank Master Policy (BMP)
• Provide insurance of banks export related financing to its customers on an
Islamic basis against both commercial and political risks
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
Financing Bank
1
Exporter
up)
3. Financing Bank applied to ICIEC to insure
the Murabaha receivables (P+Mark up)
4. ICIEC
3
4
2
5
approves,
financing
bank
pays
by
buyer
premium
5. In
case
of
non-payment
(borrower) the bank submits claim and
6
Importer
ICIEC pays compensation (90% of loss)
6. ICIEC recovers arrears from issuing bank,
pays back 10% to confirming bank
95
Member of Islamic Development Bank Group
Construction Material & Equipment
Export
Contract
NEC in Sudan
Supplier in Dubai
Murabaha
Finance
Agreement
Bank of Sudan
Unconditional Bank
Guarantee
BMP PH DIB
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 noncommercial risk
• Status – Settled June, 2007
96
Member of Islamic Development Bank Group
$25m Credit Limit approval
Under BMP
Provides Financing
Against ICIEC backed
Guarantee
Loss Payee Assignment
Allowing the banks to provide export related financing to its customers and utilize
the export receivables as security for the repayment of the credit extended.
1.
Importer 1
Exporter
2
ICIEC
1
Importer 2
3
4
2.
3.
Importer 3
5
4.
5.
6
6.
97
Member of Islamic Development Bank Group
Exporter enters into a Sale Contract
with an importer.
The Exporter concludes an
Insurance Contract with ICIEC and
pays premium.
The Exporter assigns the finance
bank as a loss payee on the policy
who has the right to receive the
claims.
The financing Bank offers the
exporter , export finance facilities
against assignment of contract
proceeds or Bills discounting
In case the buyer fails to pay, ICIEC
compensates the bank with 90% of
the contract value.
ICIEC recovers from the buyer an
returns 10% share to the bank.
STP – Sample Transaction (i)
Central Bank Guarantee
60 mn US$ Insurance Policy
Turnkey Project – Electricity Grid
Assign as
Loss Payee
National
Electricity Co.
Sudan
Finance
Tombstone
• Contract – supply and
commissioning of Electricity Grid
80% of Risk ceded
Financing Bank
International
Reinsurers
• 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
98
Member of Islamic Development Bank Group
For ECAs
99
Member of Islamic Development Bank Group
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 quotashare treaty.
Quota Share Treaty
Is 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 capacity
Excess of Loss
Is non proportional reinsurance designed to help ECAs to underwrite large
transactions
100 Member of Islamic Development Bank Group
Sample Transaction: Inward Reinsurance
Janzoor Investment Project (Libya)
Reinsurance Contract
Investor: Libyan General Trading Company Kuwait
Host country: Libya
PRI Cover
Insurance tenor: 10 years
Investment Value: US$121million
Insured amount: US$ 74 million
Janzour Project (Libya)
Risks covered: Expropriation, War & Civil Disturbance,
Transfer Restriction, Breach of Contract
ICIEC Cover: US$7.4 million
101
101 Member of Islamic Development Bank Group
Sample Transactions: Inward Quota Share
• ICIEC share :15%
• BI since inception: US$ 6.5m
ECIE
UAE
• ICIEC share : 60%
• BI since inception: US$ 8.5 m
NAIF
Sudan
102 Member of Islamic Development Bank Group
ICIEC
103 Member of Islamic Development Bank Group
We also offer technical assistance…
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.
104 Member of Islamic Development Bank Group
ITAP – IDB Group’s Investment Promotion Technical Assistance Program
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
105
105 Member of Islamic Development Bank Group
ITAP – IDB Group’s Investment Promotion Technical Assistance Program
The types of technical assistance provided by the 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.
106 Member of Islamic Development Bank Group
Client base
107 Member of Islamic Development Bank Group
Industry Relations
108 Member of Islamic Development Bank Group
Permanent Membership in
ICIEC is a Member of the Berne Union since 2009
• 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
109 Member of Islamic Development Bank Group
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
110 Member of Islamic Development Bank Group
110
Benefits of joining
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
111 Member of Islamic Development Bank Group
111
Credit Alliance
ICIEC is a member
since 2000
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.
112 Member of Islamic Development Bank Group
Member of The Prague Club since 2001
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.
113 Member of Islamic Development Bank Group
Supporting the Credit Insurance Industry in MCs
Founding member in AMAN Union (Since 2009)
Capacity Pooling
Credit Information
Central Database
Combined Business Insured of
USD 15 billion
Knowledge
Sharing Platform
Claims & Recovery
Central Register
Common Code of Conduct
Industry Best Practices
Aman Union currently includes 17 ECAs from OIC countries,
4 Associate Members and 8 observers.
114 Member of Islamic Development Bank Group
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.
ECGAO – Oman
10.
ICIEC
11.
SONAC Senegal
12.
NAIFE – Sudan
13.
Sheikan – Sudan
COTUNACE- Tunisia 14.
Turk Exim Bank – 15.
16.
Turkey
8. ECIE – UAE
17.
1.
2.
3.
4.
5.
6.
7.
CAGEX – Algeria
ECGCE – Egypt
ASEI – Indonesia
EGFI- Iran
JLGC – Jordan
Daman – Kuwait
LCI – Lebanon
Exim Bank –
Malaysia
SEP - KSA
115 Member of Islamic Development Bank Group
(AAOIFI) is an Islamic international autonomous nonfor-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.
116 Member of Islamic Development Bank Group
(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.
117 Member of Islamic Development Bank Group
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
118 Member of Islamic Development Bank Group
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.
119 Member of Islamic Development Bank Group
Claims
120 Member of Islamic Development Bank Group
Claim Payment Process
100% of
Invoice Value
121 Member of Islamic Development Bank Group
90% of
Invoice Value
Recovery Process
Recovery
Proceeds
100%
Incurred
Fees
Legal
Admin.
Net
Proceeds
Loss payee
10%
ICIEC
90%
122 Member of Islamic Development Bank Group
Sample Claim Case that
emphasis the unique
multilateral edge of ICIEC
123 Member of Islamic Development Bank Group
Overview of the Transaction
 ICIEC has issued two STP Policies to cover the exports of a
Egyptian based company (“the Policyholder”), to a Stateowned 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
124 Member of Islamic Development Bank Group
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
125 Member of Islamic Development Bank Group
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
126 Member of Islamic Development Bank Group
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.
127 Member of Islamic Development Bank Group
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).
128 Member of Islamic Development Bank Group
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.
129 Member of Islamic Development Bank Group
Business Indicators
130 Member of Islamic Development Bank Group
Business Franchise
Business Insured
Repeat Business
New Business
1160
546
619
825
1429
602
1421
2040
427
1430
131 Member of Islamic Development Bank Group
1431
1432
Major Business Indicators
New Commitments (USD mn)
3,214
1,399
2007
1,706
2008
3,364
2,135
2009
132 Member of Islamic Development Bank Group
2010
2011
Major Business Indicators
Business Insured (USD mn)
3,200
1,469
1,967
1,444
1,029
2007
2008
2009
133 Member of Islamic Development Bank Group
2010
2011
Major Business Indicators
Current Exposure (USD mn)
443
2007
559
2008
743
2009
134 Member of Islamic Development Bank Group
731
2010
1,140
2011
Claims Ratio
ICIEC
Atradius
91%
Eurler Hermes
Coface
98%
69%
130%
79%
82%
57%
97%
77%
41%
42%
45%
5%
5%
2007
2008
135 Member of Islamic Development Bank Group
13%
2009
57.0%
45.0%
50.3%
0%
1.0%
2010
2011
Technical Indicators
16.28
13.2
15.37
12.5
9.6
Premium and fees (USD mn)
Claim Paid (USD mn)
1.6
0.5
0.65
2007
2008
2009
0
0.11
2010
2011
136 Member of Islamic Development Bank Group
Business insured Distribution by Line of Business
Short Term
190
76
764
2009
Medium Term
130
87
1750
2010
137 Member of Islamic Development Bank Group
Investment
335
62
2803
2011
Portfolio Composition by sector
Top Gross Exposures by Economic Sector
Cables
5%
Transportation
4%
Papers & Packaging
3%
Power & Energy
5%
Logistics
2%
Chemicals
1%
Health Care
6%
Oil & Gas
1%
Telecommunication
7%
Banking
30%
Others
10%
Metals
11%
Sovereigns & GREs
13%
138 Member of Islamic Development Bank Group
Top 10 countries in terms of Exposure (Q1-1433)
Millions
Net Exposure
250
200
150
100
50
0
139 Member of Islamic Development Bank Group
Ceded Exposure
Claims & Recovery
Premium and fees (USD mn)
Claim Paid (USD mn)
16.28
13.2
9.6
12.5
6.6
2.9
4
0.3
1425
15.37
1.9
1426
4
1427
0.5
1428
0.65
1.6
1429
1430
0
1431
0.11
1432
Cumulative Recovery Ratio
1425
1426
1427
1428
140 Member of Islamic Development Bank Group
1429
50%
50%
46%
43%
41%
51%
47%
45%
1430
1431
1432
Claims Ratio
ICIEC
Atradius
91%
Eurler Hermes
Coface
98%
69%
130%
79%
82%
57%
97%
77%
41%
42%
45%
5%
5%
2007
2008
141 Member of Islamic Development Bank Group
13%
2009
57.0%
45.0%
50.3%
0%
1.0%
2010
2011
Contact Us
Abdulrahman Taha, PhD
CEO
Khemais Al Gazzah
Director, Operations
Iqbal Abdulkader
Head, Underwriting
Short Term Insurance
Tel: 966-2-6467545
Email :Ataha@isdb.org
Tel: 966-2-6467585
Email :gazzah@isdb.org
Tel 966-2-6467586
Email :Iabdulkader@isdb.org
Mahmud Khalid, M.A
Head
Foreign Investment Insurance
Sayed Shahbaz, CFA ,FRM
Head
Medium Term Insurance
Yasser Alaki, MBA
Head, Sales Division
Short Term Insurance
Tel 966-2-6467590
Email :mkhalif@isdb.org
Tel 966-2-6467573
Email :Shahbaz@isdb.org
Tel 966-2-6467597
Email :yalaki@isdb.org
Imad El Fatih, LLP
Head
Claims & Recovery
Rahmatnor Mohamed, MBA
Head
Reinsurance
Tel 966-2-6467574
Email :Imadeldin@isdb.org
Tel 966-2-6467596
Email :rahmatnor@isdb.org
142 Member of Islamic Development Bank Group
Thank you
143 Member of Islamic Development Bank Group