German trade credit insurer Euler Hermes has formed a reinsurance framework agreement with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).

The agreement will open up additional cover possibilities for German exporters and allow the two companies to hedge transactions which could not be covered in the past due to risk, size or foreign product share, says Euler Hermes.

The ICIEC, which includes 42 member countries from Africa, Asia and the Arab world, provides investment and export credit insurance and offers reinsurance facilities for both its members and export credit agencies which are not members of ICIEC.

The agreement will mean German exporters can take out a reinsurance policy even if the goods are not being exported to ICIEC member states, with the prerequisite that the goods and services are ultimately headed for an ICIEC member country.

Since ICIEC is a sharia-compliant institute, the reinsurance agreement is designed to meet these principles as well the conditions and regulations of the German cover system.