KEIC to Boost Export Coverage

Moves aimed at expanding exports to overcome economic downturn by raising export insurance support to 170 tln won

Korea Export Insurance Corp. (KEIC) said it will step up its insurance support to export companies to help tide over the current economic downturn sweeping the world.
KEIC Chairman & President Ryu Chang-moo, during a year-end press conference held on Dec. 17, said the company will go all out next year to help the exporters, faced with tougher times than the 1998 financial crisis, so that they will continue to play their usual role of being the strong foundation for the national economy by maintaining their export momentum.
Therefore, the CEO said, KEIC will expand its export insurance coverage to 170 trillion won next year from 130 trillion won this year.
Ryu said the export coverage for SME exporters, in particular, will be increased from 1.5 trillion won this year to 9 trillion won next year, especially in the areas of guarantees for export bill negotiations and SME plus insurance, a special commodity for SMEs aimed at SME exporters who are having trouble collecting payments for their goods and services.
At the same time, KEIC plans to expand the amount of resale insurance to 55 trillion won next year from 35 trillion won this year and the company will also increase insurance coverage to strategic export sectors such as shipbuilding, overseas construction and plant exports to $20 billion from $12.5 billion this year.
Ryu said KEIC's moves are related to a downturn in exports, which dipped by the largest amount in the past seven years in November, although exports passed the $400 billion mark on Dec. 8, the biggest annual export figure since the country began exporting goods some four decades ago.
"The company wants to respond to the call for expanding exports to overcome the economic slump and rise in demand for export insurance in the wake of the deterioration of the international trade environment by expanding insurance and liquidity to exporters," he said.
KEIC, in the meantime, successfully agreed with its labor union to freeze the pay level and cut 40 percent of pay for its director-level officials next year. The company also plans to reorganize its operation structure by reducing the number of business units from 24 to 22 and cut 15 percent of its payroll by 2012 by reducing the number of employees from 515 to 436.
Both the government and parliament, in a bid to expand the insurance coverage for exporters, have proposed and approved a bill to increase government investment in KEIC.
Korea Export Insurance Corporation (KEIC) was established pursuant to the Export Insurance Act in July 1992 as an official export insurance agency under the Ministry of Commerce, Industry and Energy (MOCIE). Its mission is to promote the nation's exports, overseas investment and other overseas business activities by providing export insurance, overseas investment insurance and credit guarantees.
The National Assembly approves the underwriting limits of the corporation and government contributions to the Export Insurance Fund every year. The corporation underwrites export insurance within the limits approved as such while taking the responsibility for operating the fund thus contributed.
Major business operations of KEIC are deliberated and decided by its Management Committee and the Board of Executive Directors. The Management Committee establishes basic policies for the corporation's activities such as the types of export insurance, coverage rates, budgets and the closing of accounts. Led by the KEIC chairman and president, the committee has ten members including high-ranking officials from the Ministry of Finance and Economy (MOFE), Ministry of Planning and Budget (MPB), Ministry of Foreign Affairs and Trade (MOFAT), MOCIE, vice president-level executives from the nation's export agencies and experts from the private sector.
Other important decisions are made by the KEIC board of directors, which is solely committed to developing export insurance products and high value-added services with a view to promoting the nation's exports and global trade. To this end, the corporation actively addresses the ever-changing global trade environment.
Today, KEIC provides domestic exporters with 13 types of export insurance and one export credit guarantee. It also offers export credit research and information services on importers and their countries and collects export receivables. nw

Chairman and President Ryu Chang-moo of KEIC