Export insurer's profits double
The government-owned Hong Kong Export Credit Insurance Corporation said profit rose more than 94 per cent in the year to the end of March, as businesses spent more on insurance, and claims fell amid the economic recovery.
The ECIC sells credit insurance to 3,500 Hong Kong exporters, who buy the coverage in case their buyers delay payment for four months or more, or even go broke.
'The global economy started to rebound in 2010. Thanks to reviving buying sentiment in overseas markets, export trade dynamism was rekindled,' ECIC commissioner Ralph Lai Yin-ping said.
'Nevertheless, with a surge in raw-material and oil prices, labour shortages on the mainland and cost increases, Hong Kong exporters, especially SMEs, continued to struggle,' Lai said.
Still, Lai is optimistic, saying Hong Kong exporters will benefit from growing global trade, especially in the Asian and emerging markets.
Profit for the year to the end of March was HK$225.99 million, up 94.43 per cent from the same period a year earlier.
The growth mainly reflected a fall in the number of buyers going bankrupt or delaying payment, with total claims down 79.2 per cent to HK$29.4 million.
The economic recovery also boosted exports, lifting ECIC's total insured business to HK$81.64 billion for the year ended March 31, up 27.3 per cent year on year. Gross premium income rose 20.5 per cent.
The US remained the ECIC's largest insured market, growing by 27 per cent year on year, followed by Britain which rose 23.9 per cent, and the mainland, the third-biggest market, rising 24 per cent.
Of the total claims, 59.8 per cent involved defaults and 36.8 per cent bankruptcies. The remaining 3.4 per cent was due to other factors.
The year the Hong Kong Export Credit Insurance Corporation was created by statute