Insurance body expands credit information services for exporters

PUBLISHED : Thursday, 28 October, 2004, 12:00am
UPDATED : Thursday, 28 October, 2004, 12:00am

NEARLY FOUR DECADES have passed since that day in 1966 when the Hong Kong government, recognising the need for a stable insurer for exporters, established the Hong Kong Export Credit Insurance Corporation (ECIC) with a contingent liability that now stands at $12.5 billion.

Since then, the corporation has been providing a wide range of insurance facilities to Hong Kong's exporters of goods and services that trade with overseas buyers on credit terms, usually of up to 180 days.

Services cover exports shipped and re-exported from Hong Kong, as well as those transported directly from suppliers' countries to their destination without passing through Hong Kong.

The indemnity provided is normally 90 per cent of the loss incurred.

ECIC is a member of the exclusive Berne Union, which works for the international acceptance of sound principles of export credit insurance and foreign investment insurance, and also provides a forum for the exchange of information, experience and expertise among its 52 members from 43 nations.

'Our policies are widely accepted by financial institutions as collateral for discounting export bills,' corporation commissioner Cheung Kam-kay said.

'In the transport and logistics arena, we provide comprehensive protection to Hong Kong's service sectors when rendering services to overseas and mainland clients on credit terms.'

Service policies include aircraft maintenance, freight forwarding, testing services and advertising. The freight-forwarding policy was launched in 1996 and covers credit risks for Hong Kong freight forwarders when they provide services to local shippers or exporters, overseas shippers or consignees and local and overseas forwarding agents.

Over the past year, the corporation has swung into action on several fronts.

Between March and September last year, the corporation provided a free credit check on overseas buyers in order to help the region's exporters establish the credibility of these customers.

At the same time, exporters who experienced difficulties during the Sars crisis last year had some relief when the corporation refunded their policy fee.

'In response to the Closer Economic Partnership Arrangement (Cepa), we set up a Cepa advisory panel to help identify the special needs of exporters entering the mainland market,' ECIC general manager Albert Lai said.

'Cepa is likely to bring new business opportunities to the service sectors.

'The EC-Link, the web-based application for exporters, was upgraded with more user-friendly features.

'A credit agency system for collecting credit information was developed and has been running in pilot mode since February.'

The corporation also stepped up its liaising with various trade associations and professional bodies, as well as small- and medium-sized enterprises, to promote its services.

It is aiming to strengthen its credit information network and improve the speed and reliability of the information it receives to facilitate the underwriting process.

'We will continue to look for the most effective credit information sources available and will roll out our internet-based platform 'EC-link - credit agency system' to agencies at large,' Mr Lai said.

'This is a further step towards paperless operations.'

To cater to the varying needs of different service sectors, the corporation is working towards providing customised policies next year and hold seminars to share its experiences.