NEW DELHI: State-owned Export Credit Guarantee Corporation of India Ltd (ECGC) is planning to bring in “premium policies” for high-end customers, in a bid to prevent top exporters from being lured away by private general insurance companies.
“We are thinking to come up with some premium policies for top customers because there is apprehension that this creamy layer will be poached away by private insurers,” said Geetha Muralidhar, Chairman-cum-Managing Director, ECGC.
Private general insurers provide cover to the best exporter and the best buyer, where the risk of default is less. Moreover, they know the multinational buyers because of their physical presence as they are in joint venture partnerships with companies operating in that part of the world, Muralidhar said.
“Hence, this has become a challenge for ECGC... Private insurers quote very low rates and get away with it because they cover only the cream business,” she added.
The company is also planning to introduce new group policies where an export promotion council or an association would be the master policy holder. Its aim is to benefit the small and medium exporters who cannot regularly do the paperwork, documentation, and the remittance of premium by themselves.
If export associations are able to stand in and be the master policyholder, then many people will be benefited, said Murlidhar.
Currently, there are few takers for such group policies. Only Tirupur Exporters Association has agreed to take up the group policy, and ECGC is working with it closely. The insurance sector regulator, Irdai, has given the company the privilege to try out new products.