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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