RU
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Export support in 2018

717.3 billion rubles
the total limit of liability for accepted insurance obligations
$17.1 billion
the total amount of insurance support provided
364
exporters supported, including 348 exporters from 55 constituent entities of the Russian Federation and 16 foreign trade houses of Russian exporters
40 %
of customers are small and medium-sized enterprises
The number of exporters-EXIAR’s customer has more than doubled in 2016-2018

In 2018, the Agency contributed a lot to the development of non-resource exports, acting as a center within the REC Group for introducing insurance support mechanisms. Significant growth in the volume of insurance support is observed against the expansion of the exporter base and risk diversification while ensuring a significant level of financial stability.

As of January 1, 2019, the total volume of insurance support amounted to $17.1 billion, which was 14% higher than the target value for 2018. The number of supported exporters also exceeded the targets, having reached 364 companies by the end of 2018.

The positive experience in doing business, financial stability and readiness for continuous improvement make the Agency a reliable partner for Russian exporters. EXIAR is an active participant of conferences, business missions and other events, which has a positive effect on brand recognition and the Agency’s understanding of the customer needs.

The dynamics of the volume of insurance support and the number of exporters supported over the past few years demonstrates a steady upward trend, namely, the average annual growth is about 38%. In 2018, the volume of support increased by more than 2.5 times as compared to that of 2015. The number of exporters supported demonstrates a similar trend, which also speaks for the Agency’s growing scope of operations. The number of EXIAR customers more than doubled over the past three years.

Figure 1
Dynamics of the volume of insurance support and the number of exporters supported
20152016201720181692543123646.68.713.117.1
  • Volume of insurance, $ bln.
  • Number of exporters, who received export support

The geography of exporters supported by the Agency speaks for wide territorial and sectoral coverage. The support was provided to 348 exporters from 55 constituent entities of the Russian Federation, as well as 16 Russian trading houses abroad, 40% of which were represented by SMEs.

As of January 1, 2019, the total liability limit under the accepted insurance obligations amounted to 717.3 billion rubles.

The CIS, Latin America and Western Europe are the leading regions in terms of credit risk accepted by EXIAR.

Figure 2
Liability structure under the accepted obligations by regions
5%10%15%20%25%Pacific basin countriesand AustraliaCISLatinAmericaWesternEuropeRussiaAsiaEasternEuropeAfricaNorthAmerica
  • as of 01.01.20188
  • as of 01.01.2019

In the reporting period, the industry structure remained the same as at the end of 2017: the leading industries in terms of the volume of liability under the accepted obligations were engineering industry, chemical industry and metal industry.

Figure 3
Liability structure under the accepted obligation by industries
5%15%20%25%EngineeringproductsMetalproductsFoodServices andworksTimber andpaper productsFuelOtherindustriesChemicalproducts
  • as of 01.01.2018
  • as of 01.01.2019

The deal with ChTPZ Group is the example of the most successful deals concluded in 2018. The Agency provided insurance that covered the supply of pipe products to the CIS countries. This is the first export insurance contract executed by ChTPZ Group, however, negotiations are already underway to expand the cooperation between the industry leader and the REC group and, in particular, with EXIAR.

In early 2018, EXIAR and Valenta Pharm entered into a short-term receivables insurance agreement. Under the terms of the agreement, EXIAR covers the risks of supply of Russian pharmaceutical products to the CIS countries. This type of financial support is traditionally in demand by companies entering foreign markets as it minimizes the risk of non-payment by foreign buyers.

In June 2018, EXIAR and Bolivia's Ministry of Hydrocarbons and Energy concluded a Memorandum of Understanding on raising funds to supply gas-powered vehicles. Thanks to Agency support, new opportunities are being created to promote the products of leading Russian motor vehicle manufacturers on the Bolivian market.

2.1

EXIAR JSC product line

EXIAR offers a wide range of specialized insurance products developed in accordance with the specifics and needs of export market participants. The Agency cooperates with companies of various sizes and business profiles, including SMEs, major corporations, state-supported companies. Agency’s main customers/partners:

  • Russian exporting enterprises;
  • Russian and foreign financial organizations, which provide credits/loans to exporters or their buyers (buyers’ banks) or serve foreign trade operations of exporters;
  • Foreign ECAs and private commercial credit insurers - in terms of facilitating risk assessment, risk sharing through reinsurance, transaction- and customer-related information sharing, possible loss settlement.
Figure 4
Agency’s product line
Products for banks and financial organizations
  • Confirmed credit insurance
    Insurance coverage applies to letters of credit confirmed by the insured bank provided by foreign issuing banks to pay for export deliveries.
  • Buyer’s credit insurance
    Insurance coverage is provided to both Russian and foreign banks in relation to loans issued to foreign customers to acquire Russian export products.
  • Export factoring insurance
    Insurance covers credit risks of an agency, to which an exporter ceded its rights for receivables under export contracts subject to deferred payment.
  • Exporter's working capital credit insurance
    Insurance is provided in respect of loans for replenishment of working capital of exporters, including secured by receivables under export contracts
  • Export-oriented production credit insurance
    The insurance product is used to protect a commercial bank against the risk of non-repayment of the loan provided as part of an investment project to create new or expand existing export-oriented production in the Russian Federation for the purchase of goods, works and services of Russian suppliers.
  • International leasing insurance
    The insurance product is used to a lessor against the risk of non-payment by a foreign buyer under a leasing agreement for the supply of Russian goods by an exporter.
Products for exporters
  • Supplier’s credit insurance
    The product is used to protect Russian exporters (and financing banks) against the risk of non-payment by a foreign buyer. Coverage applies to a single delivery made on a deferred payment basis.
  • Short-term receivables insurance
    The insurance product is used to protect Russian companies (and financing banks) against the risk of non-payment by a foreign buyer. Insurance coverage applies to regular deliveries of homogeneous goods carried out on a deferred payment basis (no more than 360 days) to regular customers abroad.
Insurance of Russian investments abroad
  • Investment insurance
    The product is used to protect Russian investors against the risk of loss of investment as a result of political events. Insurance coverage applies to investments made abroad, both in the form of capital investments and equity loans.
Figure 5
Structure of insurance-related requests in 2018, by products
34 %30 %14 %11 %8 %2 %1 %
  • Short-term receivables insurance
  • Buyer’s credit insurance
  • Exporter's working capital credit insurance
  • Export factoring insurance
  • Supplier’s credit insurance
  • Confirmed credit insurance
  • Export-oriented production credit insurance
  • International leasing insurance

The short-term receivables insurance product primarily attracts the companies that regularly deliver goods to foreign counterparties on a deferred payment term of up to a year:

  • Russian manufacturers with extensive experience in export activities, in particular, carried out through their own foreign trading houses;
  • international companies with production facilities in Russia, expanding the geography of supply of Made-in-Russia goods (international manufacturers of motor vehicles, tires, household appliances, and other goods, which have local production facilities are among the Agency’s customers);
  • newbies in export activity.

In 2018, short-term receivables insurance products were used by exporters from various industries: metallurgical, chemical, including fertilizer industry, agricultural, engineering.

The past year is characterized by growing demand for the said insurance product on the part of food and beverage producers. The same is with the exporters of pipe and hardware products, as well as timber products. The geography of supplies declared by exporters, which use short-term receivables insurance product, remains diverse and include Europe, Latin America, the CIS, Asia and Africa.

In 2018, the Agency updated the principles and conditions for using the confirmed credit insurance product, which allowed to attract a wider range of customers. Over the past year, the Agency received the requests for this product from almost all major banks. Thanks to the revised approach to product utilization, the first comprehensive confirmed credit insurance agreements were concluded in December 2018.

It is also worth noting the increased interest in export factoring insurance product on the part of Russian banks. In 2018, 5 new credit organizations addressed with requests for this product. The Agency and its customers are currently agreeing on insurance conditions. Insurance contracts for the new calendar year were concluded with regular policyholders. The first export factoring insurance contract was also concluded with EXIMBANK OF RUSSIA

2.2

SME support

Small and medium-sized enterprises are very important for the development of the national economy. EXIAR pays great attention to the tools to support SME exporters.

At the end of 2018, the Agency developed and approved a new version of the credit insurance program for the banks that provide loans to small exporters to fulfill export contracts. Moreover, in the same year, it was decided to expand the product line for SMEs to reach exporters who need credit and insurance support to approach foreign markets. The main objective of this initiative is to maintain a balanced approach while considering the interests of the parties involved and maintaining a transparent system for project risk assessment and control.

Export-oriented SMEs support will remain the preferred area of activities for the Agency in 2019. The Agency has been tasked with developing a new insurance product “Portfolio Credit Insurance”, which main parameters will be outlined jointly with potential banks-insurers by the end of 2019.

As a result of the introduction of the new product, an insured and an exporter will get the insurance product with fully transparent final conditions and reduced time for deciding about insurance coverage. These facts directly impact the satisfaction of banks and exporters.