ECIC sees claims climb 18.3pc to HK$65.8m
The government-owned Hong Kong Export Credit Insurance Corp (ECIC) reported an 18.3 per cent increase in gross claims for the past financial year, as the subprime mortgage crisis and slowing global economy led to more defaults in payments by overseas buyers.
ECIC yesterday said its gross claims - the amount of compensation already made and provision set aside for future claims - increased to HK$65.81 million for the year to March. That shaved HK$3.04 million or 6.5 per cent off the insurer's underwriting surplus, which fell to to HK$44.06 million.
However, a 46.6 per cent increase in investment income to HK$99.35 million helped cushion the impact, thanks to strong equity markets worldwide in the first half of last year.
ECIC reported net profit of HK$143 million for the year, up 24.9 per cent from the previous year.
The agency provides insurance for 100,000 local exporters against the risks of payment defaults or delays by their overseas buyers.
ECIC commissioner Cheung Kam-kay advised the exporters to beware of the credit risks amid the weakening United States economy.
'Although economic growth is expected to continue on the mainland, the impact of the subprime mortgage problem on the US economy should not be underestimated,' Mr Cheung said.
Hong Kong exporters also faced other challenges such as tightened regulations on the mainland, rising cost pressures from the appreciating yuan and high oil prices, he said.
ECIC insured HK$42.94 billion worth of business in the year to March, up 9.3 per cent from the previous year.
The corporation paid HK$37.08 million in claims, a decline of 2.5 per cent.
About 39.7 per cent of all claims were related to British buyers, followed by the US, which accounted for 31.2 per cent of all claims.
Risk business
The agency provides insurance for 100,000 local exporters
ECIC posted profit of HK$143 million for the year to March, an increase of: 24.9%
