Rwandan exporters helped to compete globally with the introduction of trade credit and political risk insurance products
Workshop on trade credit and political risk insurance hosted by the Private Sector Federation of Rwanda
NAIROBI, 30-October, 2009 - The African Trade Insurance Agency (ATI) held the first workshop in Rwanda on Trade Credit and Political Risk insurance, which targeted investors and exporters. The insurance products, which are relatively new to the African and Rwandan market, are seen as an important solution to helping exporters to compete in global markets and they are also expected to help attract more foreign investments into the local economy. Robert Bayigamba, Chair of the Private Sector Federation of Rwanda and also the Rwandan Board Representative to ATI, hosted the event.
In Rwanda, ATI currently has over $300 million worth of transactions in the pipeline. Most recently ATI provided comprehensive political risk insurance coverage to the Kenya Commercial Bank of Rwanda (KCB) to insure their investment in the first soy processing plant to be built in Rwanda. The plant will process soya bean and sunflower seeds into cooking oil and animal feed cake that will generate some US$20 million of income from exports and local sales into the economy.
"Our products are unique because they target companies, investors, contractors and other business interests that are essential to growing a country's economy," commented ATI's lead Underwriter for Rwanda, Cecilia Rague-Kaisha on the sidelines of the workshop. "I've been working in Rwanda for several years and in that time I've heard first hand stories from Rwandan companies who weren't getting paid by their foreign buyers or from others who couldn't secure financing from banks. My job is to let Rwanda companies know that ATI can provide solutions to these and many other risks".
While the trade credit insurance product was rolled out in the past few years after a gap in the market for coverage to exporters was detected, ATI is best known for its political risk insurance coverage. Most recently the Agency increased the capacity of the regional insurance market so that local insurers could provide protection to their clients alongside their automobile and property insurance policies to protect them against damage caused by politically motivated violence, terrorism and sabotage. Jubilee Insurance and UAP Insurance are two regional companies that have signed up for this coverage.
The demand for ATI's products has shown a positive growth trend in light of the global financial crisis. The Agency's 2008 financial results reflect the upward demand within the region as it posted an 80% increase in its gross written premium and a 217% growth in its net underwriting profit. ATI is also expanding outwards to include into its membership West African countries such as Ghana, and Organisation for Economic Co-operation and Development partner institutions like SACE of Italy.
Plans are currently underway to launch an ATI office in Rwanda in 2010. The regional office will provide greater access to the local market for credit risk and political risk insurance products.