Insurers to grow credit insurance portfolio

MUMBAI: Insurance companies are now sensing a huge opportunity in credit insurance, following the dispensation granted to them in the credit policy.
Private and state-owned companies are now looking at growing their credit insurance portfolio which was at one time the exclusive domain of the Export Credit Guarantee Corporation of India (ECGC). In its monetary policy, RBI had said, “To liberalise further the procedures relating to settlement of claims in respect of export bills, it is proposed to permit banks to write off, in addition to claims settled by ECGC, the outstanding export bills settled by other insurance companies which are regulated by the Insurance Regulatory Development Authority (IRDA).” Insurance companies say that this directive puts them on par with ECGC. Banks will also gain since they will save on capital. RBI has said that once an exporter confirms that the claims in respect of outstanding bills have been settled and that export incentives have been surrendered, they can write off the relative export bills. According to Tata AIG General Insurance managing director Gaurav Garg, the dispensation by RBI gives private insurance companies a large opportunity in this business. He added that Tata AIG was better placed in export credit cover as it was the most multinational among insurance companies and had a presence in most major markets. Besides Tata AIG, there are other companies that are looking forward to developing the credit insurance market. For instance, Bajaj Allianz provides credit insurance in India with support from Euler, a specialist credit insurer which is part of the Allianz Group. State-owned New India has tied up with Atradius (formerly Gerling), which is another specialised credit insurance company
Source: ET