Export credit insurance unpopular

Export credit insurance unpopular

The number of businesses buying export credit insurance has remained low despite a national trial programme that promoted its use, experts said at a conference held yesterday in HCM City.

Speaking at a conference on the benefit of export credit insurance, Dang Quoc Hung, vice chairman of Handicraft and Wood Industry Association of HCM City (HAWA), said that many enterprises did not know that such insurance was available.

Mai Hong Viet, marketing director of Bao Viet Tokyo Marine Insurance at the HCM City branch, said that only 50-70 enterprises had bought the export credit insurance in the past three years. Most of them were foreign companies.

Insurance providers have not advertised the programme well, and the premiums remain rather high compared to other common insurance programmes, he said.

The conference, organised by Hawa and Bao Viet Tokyo Marine Insurance, was held to provide more information about the insurance to exporters, especially those who export wooden products.

Export credit insurance protects export companies' foreign receivables against commercial and political risks that could result in foreign buyers' non-payment of export invoices, Viet said.

Such insurance could help increase the volume of the country's exports, especially in new markets.

Hung said under the current economic downturn, exporters faced a high risk of losses. "Even if company buyers have never skipped payments, their companies could become insolvent due to unforeseen circumstances," he explained.

In these situations, export credit insurance would protect export businesses, he said.

Nguyen Van Hung, director of Hung Dat Company, said the insurance would be useful for wooden product exporters.

However, he said most enterprises were afraid of revealing their information as well as their customers' information to insurance companies.

Dang Van Dung, director of Asia Manufacturing Construction Co Ltd, said many companies did not know that the Government subsidised 20 per cent of the premiums for this kind of insurance.

Hung of Hawa said that insurance providers should improve communications to the business community about the insurance so they can better understand its advantages.

"Insurance companies should also develop more policies to make export insurance more attractive to Vietnamese companies," he said.

vietnamnews