The Board of Directors of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank (IDB), cleared the Annual Report and the financial statements for 1435H, at its recent meeting held in Jeddah. The Board recommended that the financial results and the annual report be submitted for approval to the 22^nd meeting of the Board of Governors of ICIEC scheduled to be held in Maputo, Republic of Mozambique, on 11 June, 2015.

The Annual report shows a growth in export credit and political risk insurance business volume. During the year 1435H (2014), the Corporation facilitated $4.3 billion exports and investments for its member countries representing an increase of 29% compared to previous year.

The Board of Directors also endorsed the 10-year strategic framework of the Corporation, and appointed new external financial auditors for 1437H (2016).

Mr. Bert Bruning, the Managing Director of Atradius Dutch State Business N.V. (Atradius) – one of the leading Export Credit agencies in the world – paid a business visit to the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) in Jeddah, Saudi Arabia on April 13, 2015. The visit was a good opportunity for the two institutions to exchange ideas on enhancing the cooperation between them in order to support business between the Netherlands and ICIEC’s member countries. Atradius and ICIEC have already covered jointly projects in the last two years for over USD 2 billion, where ICIEC has reinsured Atradius for over USD 500 million. In particular, infrastructure related projects in Saudi Arabia and Egypt with high developmental impact have benefited from the ICIEC-Atradius partnership. The two institutions intend to continue this cooperation for the benefit of projects in other member countries in the near future.

Bert Bruning, Managing Director of Atradius states: “Atradius Dutch State Business is very pleased to cooperate with its strategic partner ICIEC to support projects that Dutch companies undertake in ICIEC’s member countries. The broad knowledge and experience of ICIEC is an important and valuable element of our ability to support such large transactions.”

ICIEC and Korea Trade Insurance Corporation (K-sure) concluded an MOU to support cross border projects between South Korea and ICIEC’s member countries. The agreement was signed on March 4, 2015 in the headquarters of ICIEC in Jeddah, Saudi Arabia.

The MOU aims to promote cooperation between ICIEC and K-sure through reinsurance, co-insurance and/or fronting to facilitate the access of ICIEC’s member countries to capital goods, high technology and the flow of investments from South Korea into ICIEC’s member countries. The agreement aims also to facilitate the exchange of information in the respective markets of the two institutions.

Mr. Kim Young-hak, President of K-sure, said “Korea and the Middle East are partners that share a history of over 50 years of economic relations. Both K-sure and ICIEC will explore areas of cooperation, in addition to the additional ones including energy and construction sectors.” He was optimistic for K-sure to build a “trade finance highway” that would take Korean firms to ICIEC’s member countries markets by working with multilateral Islamic financial institutions such as ICIEC.

Mr. Khemais El-Gazzah, Chief Operating Officer of ICIEC, who signed the MOU on behalf of ICIEC, said “the MOU with K-sure is in line with the priorities of ICIEC to enhance cooperation with export credit agencies in order to support our member countries, especially in promoting foreign direct investment and developmentally impactful cross-border projects.” Such cooperation should add a considerable value to both entities — Korea and ICIEC’s member countries, he further said.

Recently, ICIEC has provided US$ 80 million reinsurance support to the Overseas Private Investment Corporation (“OPIC”) for the latter’s political risk insurance policy to Apache Corporation (“Apache”). The policy was issued to Apache to cover its investment in the Arab Republic of Egypt against political risks for a tenor in excess of 5 years.

Apache’s project in Egypt (“Apache Egypt”) involves exploration of oil and gas under various concessions granted by the Government of Egypt in several locations in Egypt with main activities in the Western Desert. Apache’s commitment to Egypt began in 1994 with their first Qarun discovery well.

The Project provides employment opportunities for the locals in the country. As of the end of 2013, the total headcount of the joint ventures is approximately 10,000 staff, most of whom are local employees and contractors. Furthermore, the Project provides opportunities for developing the technical and managerial skills through daily operation and maintenance and through conducting training sessions for local employees.

Eng. Hani Salem Sonbol, the Acting Chief Executive Officer of ICIEC commented on this transaction and said that “ICIEC’s involvement in this transaction is in line with its strategy of supporting member countries with respect to retaining foreign direct investments in the country during this critical transitional period for Egypt”.

About OPIC

OPIC is the U.S. Government’s development finance institution which was established in 1971. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance and support for private equity investment funds. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide.

About Apache

Apache Corporation, formed in 1954, is among the world's largest independent exploration and production companies and is based in Houston, Texas. Apache currently has exploration and production interests in six countries: the United States, Canada, Australia, the United Kingdom North Sea, Argentina and Egypt.

he Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group, and Sumitomo Mitsui Banking Corporation Europe Limited (SMBCE), a subsidiary of the Sumitomo Mitsui Banking Corporation (SMBC) of Japan, signed a Memorandum of Understanding (MOU) for cooperation.

The MOU is intended to strengthen the existing partnership between the SMBC Group and ICIEC and to enable SMBCE and Sumitomo Mitsui Banking Malaysia Berhad (SMBCMY), the Shariah-compliant arm of SMBC, to better meet the needs of their clients using various insurance programmes provided by ICIEC in the area of project and export finance on global basis. This is particularly pertinent for the SMBC Group in relation to its increasing number of infrastructure projects in ICIEC’s member countries in the Middle East, Africa and Asia.

The MOU was signed on behalf of ICIEC by Eng. Hani Salem Sonbol, the Acting Chief Executive Officer of ICIEC, whereas Mr. Masahiko Oshima, the Chief Executive Officer of SMBC Europe signed on behalf of SMBCE.

About ICIEC

With Aa3 rating by Moody’s, ICIEC provides investment and export credit insurance to facilitate cross border investments and to encourage trade transactions in its 42 member countries in the Middle East, Africa and Asia. ICIEC provides these credit and country risk mitigation instruments in line with the Shariah.

About SMBC

The SMBC Group currently provide Islamic finance service through SMBCE and SMBCMY, both wholly owned subsidiaries of SMBC. The latter obtained the approval for providing the Islamic finance service by the Malaysian authorities in March 2014.
 

The Chairman of the Board of Directors of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a Member of the Islamic Development Bank Group, has appointed Eng. Hani Salem Sonbol as Acting Chief Executive Officer of ICIEC, this is in addition to his current duties as the Deputy Chief Executive Officer of the International Islamic Trade Finance Corporation (ITFC). Eng. Hani is replacing Dr. Abdel-Rahman El-Tayeb Ali Taha, who retired after 20 years servicing as CEO of ICIEC and who has been instrumental in the evolution of ICIEC as the first world credit and political risk insurer operating in compliance with Islamic Shariah principles. Eng. Hani is a Saudi National, he joined the Islamic Development Bank Group in 1987, and has held a number of senior positions within the Group, including Regional Director of IDB Group in Kingdom of Morocco, and Director of the Trade Finance and Promotion Department (TFPD) in the IDB Group, taking up his current position as Deputy CEO of ITFC since January 2008.  Eng. Hani holds a Bachelor’s degree in Civil Engineering from Bluefield State University, West Virginia, USA, in 1984; and Master’s degree in Engineering Management with honors from George Washington University, USA, in 1987. He has attended several training courses among which is the Leadership Development Programme of Harvard University, USA.

ICIEC was voted as the “Best Export Credit Agency (ECA) in the Middle East and North Africa Region for 2014” by GTR (Global Trade Review) – the world’s leading news source, publisher and event organizer for global trade, commodity, export and supply chain finance industries magazine.
The recognition was conferred on ICIEC at the GTR MENA Leaders in Trade 2014 awards.
The ICIEC’s remarkable achievement over the last two decades compared with peer institutions catapulted the Jeddah, Saudi Arabia-based corporation to new heights, as shown by the success of its 14 products and policies in the field of trade, investment, and projects while at the same time providing trade and political risk reinsurance to member countries worth US$24.4 billion in decades.
ICIEC started its operations in 1995 with only three products – the Comprehensive Short-Term Policy (CSTP), Bank Master Policy (BMP), and Supplemental Medium-Term Policy (SMTP). As the membership grew from 15 countries in 1996 to 43 countries at present, the product mix likewise increased. Over two decades, ICIEC has been true to its vision and mission as a world-class multilateral insurer, playing a major role in the facilitation of trade and investment for member countries and a preferred partner for companies seeking access to new markets. As of 2014, ICIEC has facilitated over US$22 billion in trade transactions and US$4.3 billion in foreign direct investment in member countries, an increase of 29% compared to previous year.
It worth to note that, last year GTR changed the criteria in evaluating its leaders in trade winners, in which the magazine’s corporate readers were asked to vote in favour of the leading banks, financial institutions, insurers and brokers in the MENA trade finance market.

Your Excellencies the Governors and Delegations of MCs, Honorable Guests, Brothers and Sisters, Al-salam Alaykom Warahmatallah

It gives me great pleasure to congratulate you and ourselves for the 40^th anniversary of IDB which coincides with the 20^th anniversary of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).

ICIEC was the first private sector oriented autonomous entity established within the Islamic Development Bank Group following the recommendation of the Standing Committee on Commercial and Economic Cooperation of the OIC (COMCEC) in its 1989 meeting in Istanbul, and came into being in 1994, and commenced business a year later.

I have the pleasure today to highlight some of the key accomplishments of ICIEC during the last 20 years.

The First achievement  is the creation of a first class credit and political risk insurance organization, employing industry best practices, managed by well-trained and dedicated staff, enjoying AA3 rating and the recognition and respect and cooperation of the international and regional credit and PRI insurance and reinsurance industry.  Thus providing the Islamic Financial Services industry with its only Sharia-complaint risk mitigation and credit enhancement service.

The second and more important achievement is that ICIEC has delivered on its mandate using a small paid capital and accumulated reserves of ID 140 million.  The corporation managed to do more than $ 18 billion of insurance cover facilitating 24 billion of exports, imports and investments for member countries. This achievement is indeed remarkable in view of the deteriorating economic and political risk environment and the resulting high risks ICIEC was relied upon to cover. It is also important to realize that 40% of ICIEC insurance capacity was attracted from the international reinsurance market.  This would not have been possible without the AA3 rating and high reputation ICIEC was able to build in the market.

-         At the end of the day for the member countries what is important is that , ICIEC has been able to significantly add to IDB mission to positively affect lives across our member states, by supporting critical projects in infrastructure sector, providing, electricity, and clear water, creating new jobs, transferring skills and technology, supporting food security through supporting countries coming out of conflict; Many of the transactions and projects we insured would not have materialize without our insurance cover.

-         We should also not forget ICIEC contribution to the development of the export credit insurance industry in member countries through TA, reinsurance, and exchange of information with national export credit agencies under the umbrella of the Aman Union which ICIEC established in 2009.

-         Finally I would like to stress the fact despite the challenging business environment,  not only have ICIEC preserved its paid-up share capital, but was able to increase it through accumulating substantial reserves 27% resulting in a strong balance sheet and a sound financial position.

 Challenges and Obstacles

These achievements did not come easily. Formidable obstacles and challenges had to be surmounted and overcome.

The small capital base of the Corporation limiting ICIEC insurance capacity. Yesterday the utilization of insurance reached the alarming level of 96%. .  I take this opportunity to call upon the member countries to enhance the financial resources of the corporation by subscribing to the remaining part of the capital increase you approved three years ago,  to enable ICIEC to meet the increasing demand for its services by member countries during their difficult times.

Going forward the most critical challenges are those relating to the business strategy:

1.    Should ICIEC continue to focus on short term trade credit insurance business despite fierce competition and low premium rates, or focus more on the more lucrative developmental medium and long term business in which it has a competitive edge, but is riskier than short term business?

2.    How can the Corporation deal with the deteriorating political and economic environment in several member countries? Should it lead the market as insurer of last resort, as its mandate implies, or follow the market and adopt a risk-averse attitude?

3.    How can the Corporation improve its financial performance and at the meantime expand its business in view of the low premium income and high operating cost?

Finally, I genuinely believe that whatever the challenges faced by the Corporation, with your support, ICIEC has what it takes to come up with the appropriate solutions to enable it to develop and continue to deliver on its mandate in the service of its member countries.

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ICIEC Celebrates 20th Anniversary

In the occasion of its 20 years Anniversary. ICIEC held a seminar titled “The Future Role of ICIEC in Supporting Trade and Investments In Member Countries“ on Tuesday 24 June 2014 on the margin of its the Board of Governors’ 21st Annual Meeting, which was held on June 20th, 2014 in Hilton Hotel, Jeddah.

The event coincided with the 40th Anniversary of its parent Islamic Development Bank (IDB) which was inaugurated by HRH Prince Salman Bin Abdulaziz, the Crown Prince, Deputy Premier and Defense Minister of the Kingdom of Saudi Arabia, and the Board of Governors’ 39th Annual Meeting, which was held on June 25th, 2014.

The participants discussed the challenges that ICIEC and other providers of credit and political risk insurance need to overcome and the opportunities to take advantage of so that they cater to the ever-changing needs of their clients.

Dr. Abdel-Rahman Taha, the CEO of ICIEC, on the occasion commented “the seminar aimed at taking a forward-looking approach to ICIEC’s relevance to the economic aspirations of its member countries”.

The seminar was attended by representatives of a number of IDB/ICIEC Member Countries, relevant international institutions, experts in the field of export credit insurance, as well as client and potential client of ICIEC inside/outside Saudi Arabia.

The International Union of Credit & Investment Insurers (Berne Union), was also represented by its Vice President, Dr. Andreas Klasen, who delivered the keynote address. Peter Jones, Former Secretary General of Berne Union moderated the a panel discussion on “The Future Role of ICIEC- How can ICIEC best contribute to the developments of its Member Countries” ?

ICIEC Organizes a Seminar on: “The Future Role of ICIEC in Supporting Trade and Investments In Member Countries”

This year, The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) celebrates its 20 years Anniversary which coincides with the 40^th Anniversary of its parent Islamic Development Bank, and at the margin of the Board of Governors’ Annual General Meeting of the IDB Group, which will be held from 26^th June 20^th 2014, under the Patronage of the Custodian of the Two Holy Mosques King Abdullah Bin Abdulaziz, in Hilton Hotel, Jeddah, ICIEC will organize a seminar titled “The Future Role of ICIEC in Supporting Trade and Investments In Member Countries“ on Tuesday 24 June 2014 at the same venue. 

Dr. Abdel-Rahman Taha, the CEO of ICIEC, said “As its title indicates, the seminar seeks to take a forward-looking approach to ICIEC’s relevance to the economic aspirations of its member countries. In this respect, the seminar will discuss the challenges that ICIEC and other providers of credit and political risk insurance need to overcome and the opportunities to take advantage of so that they cater to the ever-changing needs of their clients.”

The seminar will gather representatives of a number of IDB/ICIEC Member Countries, relevant international institutions, experts in the field of export credit insurance, as well as client and potential client of ICIEC inside/outside Saudi Arabia. One day seminar will witness the participation of The International Union of Credit & Investment Insurers (Berne Union), will be represented by The Vice President, Dr. Andreas Klasen, who will deliver the keynote address.