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ECGC assures exporters against increase in insurance premium despite Covid disruptions

ECGC assures exporters against increase in insurance premium despite Covid disruptions

ECGC CMD M Senthilnathan says all payable claims will be duly paid and that it has enough financial resources to meet any increase in claims

ECGC Chairman and MD M Senthilnathan ECGC Chairman and MD M Senthilnathan

ECGC Ltd has assured the exporters that it will not increase the insurance premium and will continue to give credit insurance cover at the same cost despite Covid-related disruptions.

ECGC Chairman and MD M Senthilnathan, during a media address in Mumbai on Friday, said “all payable claims will be duly paid, and we have enough financial resources to meet any increase in claims”.

The interaction was held in the light of the recent decision of the Cabinet to infuse Rs 4,400 crore additional capital and list the corporation on the stock exchange.

“The support from the government is very timely and adequate. This will add to our financial strength not just to make claim payments but also to expand our services,” he added.

Also read: ECGC gets Cabinet approval for stock exchange listing

Senthilnathan further stated that there is an enormous opportunity for a country like India, where international businesses across the globe are looking to seriously diversify supply sources.

About India’s exports sector, he said the V-shaped recovery (post-pandemic) will positively add to the growth of international merchandise exports.

“It is predicted that the international merchandise exports will grow at 3.1% per annum till 2030 to reach $26 trillion. When many private insurers had withdrawn from the market (owing to the pandemic), we had expanded our cover during 2020.  We are like firefighters,” he added.

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Senthilnathan said that unlike other countries, in India, the government has created a special purpose vehicle in the form of NEIA (National Export Insurance Account) Scheme to support exports and ensure the trust is funded on a leverage ratio of 1:20 so that the risk is undertaken by the trust.

The Union Cabinet had recently also approved infusion of Rs 1,650 crore grant-in-aid over five years.

At a presentation given during the event, Export Credit Guarantee Corporation (ECGC), General Manager, Nirdosh Chopra said ECGC paid around Rs 7,500 crore claims during the last five years, thereby helping exporters and banks in executing their business without any delay.

He added that the capital infusion will enable the state-run company to issue insurance covers that can support additional exports of Rs 5.28 lakh crore over the five-year period.

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