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Garant has signed a number of co-operation agreements to help aid its expansion in emerging markets.

The political and trade credit insurance provider will partner with the Export-Import Bank of Malaysia (Mexim) and the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).

It has also been invited to join the Aman Union, the forum assembling risk insurers in member countries of the Organisation of the Islamic Conference, as a permanent observer.

Garant CEO Louis-Habib Deloncle tells GTR that the arrangements are “flexible” and designed to give the company access to “increased capacity” in markets to which it isn’t indigenous.

However, the agreements are open and non-binding. They will see Garant and its partners share information and have first refusal on the provision of extra insurance capacity. There is no obligation for Garant to accept its partners’ bids.

Deloncle says of the agreement with Mexim: “We see many of our European clients establishing subsidiaries in the region, whether in Singapore or Kuala Lumpur. I think there will be a growing trend of indirect exports, via subsidiaries, entering these markets.

“Clearly Malaysia wants to become a regional business hub; I wouldn’t say it would compete with Singapore, but there might be some competitive advantage to working from Malaysia instead of Singapore; it may be favourable to importers from certain regions.”

He adds that the partnerships, along with Garant’s membership of the Aman Union, are part of a conscious drive to engage with local insurers with established presences in the likes of the Middle East and Malaysia.

He says: “All [the agreements] have the same rationale, which is to say that more and more when writing single risk – combined political and commercial risk – we need to have the inside views of the local actors. We need to have a connection with those involved in the economic and political figures to try to understand what the issues are.

“The balance is shifting gradually from developed to emerging countries. The local insurers have more need to cover political risk insurance and credit insurance in other regions of the world and Garant is working in 160 countries, so we can share views with local partners, including those that are members of the Aman Union.

“Taking a risk in a country like Iraq isn’t easy with only western eyes. When we do it in connection with a local player who has the right access, it becomes possible. When a local insurer is performing sales in Latin America or Sub-Saharan Africa they may be interested in having a guarantor with track record in these countries. So it’s a joining of hands.”

Deloncle tells GTR that the evolving nature of regional attitudes and of political risk insurance itself will lead to the company establishing further partnerships in the future. He says: “It’s clear that since the financial crisis of 2008, we’ve entered into a period which will see growth in the protection of national interests and economic patriotism. It’s hard to know which format these will take but it will lead to more constraints on foreign operators wanting to work within certain countries.

“It’s important to have co-operation with local players, to understand where and when the political constraints might occur. The more important a supply of certain goods is to a country, for example, the more flexible a country will be in trying to attract it. When the goods can be easily found elsewhere, the protection of national interest will make life more complicated for foreign suppliers.”