|
|
| • EXCH RATES |
|
Baht/$ 34.93/97 (Bid/Ask)
|
GOLD |
12400
-50
|
|
RISK MANAGEMENT
POST REPORTERS
Demand for trade credit insurance is expected to rise, as growing concerns over a world economic recession prompt exporters to seek coverage to protect against payment default risks.
"Following the collapse of ... Lehman Brothers, it's unpredictable what is going to happen next [to other firms]," said Yoottana Kingkawkantong, vice-president for business development of Aon (Thailand), the local arm of Aon Corp, the world's biggest insurance broker.
"Trade credit insurance can serve as a strategic management tool by protecting the insured from commercial accounts receivable losses following a customer's bankruptcy or payment default, or events in overseas markets such as political and turmoil or import and trade restrictions and financial crises."
Currently, trade credit insurance in Thailand is worth only about one billion baht a year in premiums compared with more than 60 billion for the entire general insurance business.
Mr Yoottana said banks that lend to exporters are also expected to seek more trade credit insurance to protect against bad loans and financial losses.
Global insurance rates have been rising as many foreign insurers are suffering from investment losses or poor returns, and have been looking to make more profits from underwriting.
Premiums for trade credit insurance also have almost doubled. For petrochemical businesses with turnover above 50 billion baht a year, the premium is now 0.11% of turnover, up from 0.05%. Customers with turnover of about one billion baht would face premiums of 0.2% to 0.5% of their turnover.
Raffy Rios, executive director for specialty lines of Aon Singapore, said trade credit insurance was also expected to grow in Asia Pacific, given the high exports from the region to the slowing US and European markets.
"Concerns are growing among exporters that a once Grade-A market like the US and the EU experiences financial problems, increased risks in other secondary markets or emerging markets are inevitable," said Mr Rios.
Prev
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Next
