Zurich North America’s Zurich Emerging Markets Solutions (ZEMS) group has concluded a political risk insurance cooperation agreement with IFTRIC, the Israeli government-owned export credit agency to provide political risk insurance for Israeli exporters who export to emerging markets.
The announcement noted that “Companies working with official government agencies often have limited access to political risk insurance for exports because of restrictions on the levels of support such agencies provide. Prior to this cooperation agreement, Israeli companies typically have had to sign a number of insurance agreements to obtain an adequate amount of coverage.”
“The total insurance package provides 95% coverage, and gives Israeli exporters insurance coverage on a par with that provided by leading European countries such as Germany, France and the United Kingdom,” said the announcement.
Details provide that IFTRIC and ZEMS share the political risks on certain transactions “that meet the underwriting criteria of both parties. ZEMS will have the option to directly insure 15% of each transaction, with a coverage percentage of up to 95%. The other piece of the transaction, representing 85% of the total value, will be insured by IFTRIC. A portion will be reinsured by ZEMS, with a coverage percentage of up to 95%.”
Zurich indicated that the new arrangement would make it significantly easier for Israeli exporters to increase trade with emerging market countries. Uri Bernstein, Managing Director of IFTRIC, stated that, “This agreement essentially levels the competitive playing field for Israeli exporters by giving them the same coverage terms that are available to companies abroad. We expect that this significant improvement in financing conditions will make our country’s companies more competitive and encourage them to expand their operations globally.”
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