WHEN raining, people need umbrellas. In the same way, when Korean exporters face times of difficulty, they resort to the Korea Export Insurance Corporation (KEIC). As an official export credit agency (ECA), KEIC under the Ministry of Knowledge Economy of Korea helps Korean exports contribute to the national economy by providing export credit insurance, overseas investment insurance and credit guarantees. Therefore, this corporation underwrites credit insurance while managing the Export Insurance Fund.
The National Assembly of Korea approves credit insurance limits annually, while the Korean government takes care of the Export Insurance Fund, KEIC’s financial resource. KEIC offers export credit insurance services to cover risks that may occur in the export of goods and services, overseas construction and investment and other external transactions, as well as managing foreign exchange and interest rate risks. KEIC also provides overseas debt collection services and credit information services, including research into buyers’ credit worthiness. KEIC is committed solely to developing export credit insurance products and high value-added services to promote the nation’s exports and global trade.
Late last year, the Korean economy faced a red right with the advent of a global economic crisis. However, one year later, Korea is regarded as being one of the economies that successfully overcame the global economic downturn. Korea’s exports are expected to jump to No.9 in the world as it suffered a smaller decrease compared to its rivals. KEIC is an unsung hero behind Korea’s strong performance in exports despite the global economic slump.
Ryu Chang-moo took office as Chairman and President of KEIC in September of 2008 when the global economic crisis began to take place in earnest. However, Ryu promised not to remove umbrellas from exporting companies. The spirit behind the promise is “to serve as a reliable partner in stormy times.” In fact, KEIC expanded export insurance more than 30% to 170 trillion won from the year before in accordance with the 2009 Export Insurance Emergency Management Plan.
KEIC’s underwriting volume stood at 151 trillion won as of November 20, 2009, approximately 30% up from the year earlier. Threfore, KEIC is expected to reach its goal of 170 trillion by the end of this year. In particular, credit guarantees for small and medium- sized companies have been set at six trillion won, four times the amount of last year. Out of the 6 trillion won, 5.1 trillion won has already been given to them. As of November, Korea’s total exports fell 17.8% to US$314.2 billion from a year earlier.
However, Korea’s other countries, such as the UK, Germany and Japan suffered a decrease of more than 30% in exports due to a decrease in world trade. This means Corporate Korea has been performing relatively well in the global exporting race. In particular, KEIC has focused on providing export credit insurance services for Korean exporters of mobile handsets and semiconductors. Therefore, Korean exporters could increase their market shares around the world at a time when their competitors faltered due to the economic turmoil.
KEIC is planning to provide 190 trillion won in export insurance support in 2010. This means KEIC’s emergency management will continue next year, too. With Korean exporters continuing to need export credit insurance services next year, KEIC pledges to support and reassure them in times of difficulty, acting as their umbrella to shield them from the rain.