UAE total trade credit insurance to reach $50 million in 2013

Dubai: Trade credit insurance across the UAE is expected to grow by 34 per cent this year to reach $50 million (Dh183 million) in 2013, said Massimo Falcioni, CEO, Euler Hermes GCC, global leaser in credit insurance.

Last year, the total value of trade credit insurance in the GCC reached $56 million while it is expected to be $78 million in 2013.

Credit insurance covers the risk of non-payment when a business offers a trade credit to a corporate customer.

Hermes has 34.9 per cent of the global market share, 46 per cent of the GCC market share and has around 38 per cent of the UAE market share.

While the firm has 270 customers in the Gulf region and monitor 50,000 companies in the GCC its risk database, their business in the UAE market is expected to grow by 30 per cent this year. He remarked that Hermes has $10 billion of global exposure and 55,000 customer worldwide while it has data for tracking 40 million companies in the world.

“Companies based in the GCC area are increasingly aware that the uneven global environment requires adopting risk management tools such as credit insurance that can protect financial strength in the long run,” Falcioni added.

“GCC countries are actively investing in skilled services and innovative industries to prepare for a future that is less reliant on oil and natural gas reserves,” he said. ”We are ready to support new customers through a multi-channel distribution strategy within the six Gulf countries, leveraging the increased interest and demand for credit protection in domestic and export trade.”

As global insolvencies are expected to increase by 8 per cent this year as well as the insufficient momentum of the recovery in Europe, credit insurance will definitely grow this year, added Wilfried Verstraete, Chairman of the Board of Management of Euler Hermes Group.

He said: ““While economic difficulties continue in the Eurozone, Euler Hermes investments in growth markets continue to bear fruit. Our global turnover at the end of March 2013 stands at €619.3 million, up 5 per cent versus the first quarter of 2012. The Middle East together with the Americas and Asia are the primary growth drivers.”