Australian export credit agency (ECA) Efic is completing the sale of its short-term export credit insurance business to Gerling NCM (recently renamed Atradius).
The sale will be completed on <
- xml:namespace prefix = st1 />September 30, 2003 subject to Atradius receiving an appropriate licence from the Australian Prudential Regulation Authority to operate in Australia.
The sale of the short-term export credit insurance business follows a comprehensive review of domestic and international developments in the export credit insurance and financial services industries by the Australian government, Efic’s owner, in 2000.
The review found that there have been significant changes in recent years in the short-term export credit insurance industry, and concluded that there is now considerable private market capacity. The review also found that it was not practical for a small scale business like Efic’s credit insurance business, to fund the IT investment which would be critical for it to continue to offer best practice export credit insurance products and services to Australian exporters to ensure they remain competitive in the international marketplace.
After an international tender involving a number of credit insurers, Efic and Gerling NCM entered into an alliance agreement in February 2002. Since that time, Efic and Gerling NCM/Atradius have worked together to introduce to clients the benefits of Gerling NCM’s underwriting capacity, investment in information technology, sophisticated online services, and extensive buyer databases.
“The decision by Efic and the Australian government to proceed with the sale of the short-term export credit insurance business to Gerling NCM reflects Gerling NCM’s ability to successfully underwrite and reinsure Efic’s export credit insurance business during the alliance and deliver improved service levels to Efic’s export credit insurance clients,” says Peter Young, chairman of Efic.
The second major outcome of the review was the government’s recognition that Efic’s medium to long-term export finance business should continue, and has an important role if Australia’s suppliers of capital goods and services are to be successful internationally.
“Efic will continue to make a significant contribution to Australia’s export performance after the sale of the short-term business. Our medium to long-term facilities, including direct loans, export finance guarantees, political risk insurance, medium-term insurance, bonds, and export working capital guarantee facilities are important to the growth of Australia’s export trade,” adds Young.