Trade credit insurances in UAE to grow by 50%, according to Coface Emirates Services

Their predictions were released today in Coface's quarterly country risk assessment survey. The report revealed a strong showing for the GCC, where TCI currently stands at AED20Bn, with the UAE gaining an A3 rating for the first quarter of 2013.

According to Gregory Le Henand, Coface's GCC Country Manager, this reflects the UAE's premier position as a regional and international hub for import and re-export. Le Henand said, "Whilst oil prices remain high at around $115 per barrel, GDP rates continue to underpin public spending and safeguard trade which is the lifeblood of Dubai's economy".

Coface publishes quarterly country risk assessments based on their insights of 60 million companies and the expertise of 350 underwriters. The risk assessments are a crucial indicator on the health of both national economies and the volatility of the firms that trade with one another.

TCI - provided by Coface - covers the losses generated by the non-payment of customer debt, something which has haunted global and local economies since the economic crisis of 2008. Highlights of the report present a more optimistic picture than then, but Le Henand says a number of countries remain volatile.

Coface predicts a continued recession at -0.1% in the Eurozone with a persistent contraction in activity in Southern Europe. Growth in the USA will slow down to +1.5%, whilst emerging countries will post growth that is both healthy and sustainable at +5.2%.

Among emerging countries, Coface has upgraded Indonesia which has demonstrated remarkable resistance to the recession in advanced countries. In contrast, the country risk assessment for India has been downgraded to A4 and the Indian model is being brought into serious question.

With risks in advanced countries deteriorating without let up since 2008, the gradual improvement in corporate risks in emerging countries is continuing. Coface attributes the new hierarchy of risks to the greater resistance of emerging nations to external crises as being the result of more responsive, but prudent, economic policies. Furthermore, economic growth in emerging countries benefits from the uninterrupted expansion of their middle classes.

Coface has accordingly upgraded the assessment of Indonesia to A4 and has placed the B assessment for the Philippines under positive watch. With little correlation with the European recession, high growth and progress in public finances and in their banking sectors, risks have been significantly reduced in both economies.

In line with this trend, Coface achieved good results in 2012 thanks to the emerging markets performance: "Premiums are up by 20.1% in Asia Pacific, 18.5% in Latin America and 4.1% in MENA. Current net profit stood at €129m, up 6.6%, and turnover was Eur1,571m, up 7,4% compared to 2010," Mr. Le Henand added.

Coface's GCC operations are headquartered in Dubai, where Trade Credit Insurance (TCI) is available for UAE companies through Coface's local insurance partner National General Insurance (NGI). Coface also offers credit insurance through its partners in Saudi Arabia, Jordan, Bahrain and Oman.

The ratings assigned to Coface by Fitch (AA- with a stable outlook) and by Moody's (A2 with a stable outlook) have been confirmed, as such reflecting Coface's solid competitive position in the worldwide credit insurance market.