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Trade Credit Insurance in India

  • April 2014
  • -
  • Finaccord
  • -
  • 20 pages

Trade Credit Insurance in India is a report about the market for trade credit cover in India. In addition to documenting the development of the market value from 2009 to 2013, the report also divides it for the most recent year between four key segments: between small companies with an annual turnover of less than USD 5 million and larger companies with a turnover above this threshold; between single-risk and annual policies; between export and domestic trade credit insurance; and between protection acquired for political risks and cover bought for business risks.

These unique market splits are based in part on a survey of leading brokers of trade credit insurance in India. This same survey also identifies the underwriters of this type of cover used by brokers on a regular basis, gives an input into Finaccord's estimates for the market shares of underwriters of trade credit insurance in India, provides a basis for commentary surrounding distribution channels used for this type of policy, and informs Finaccord's forecasts for the market value through to 2017.

Key features of this report include:

- quantification of the market size for trade credit insurance in India: how much is the market worth, how has it developed since 2009 and how does it break down into key segments?

- presentation of the actual or estimated market shares of underwriters of trade credit insurance in 2013 based on both the broker survey and other available data sources, plus identification of leading brokers of this type of cover;

- audit of the frequency of usage of underwriters by major brokers of trade credit insurance in India: to what extent are competitors effectively challenging the main incumbent underwriters?

- availability of an accompanying PartnerBASE™ dataset that logs partnerships for trade credit insurance identified by Finaccord across a combined total of over 30 leading banks and major trade associations;

- forecasts for the market for trade credit insurance in India and how it will split between domestic and export trade credit cover: what is this sector likely to look like in 2017?

Table Of Contents

Trade Credit Insurance in India
Table of Contents

Executive Summary

Introduction

Market Analysis

List of Graphics / Tables





0.0 EXECUTIVE SUMMARY

1.0 INTRODUCTION

What is this report about?

Rationale

Several factors underpin the rationale for the production of this study

There are several distribution channel options in addition to brokers

Globally, trade credit insurers cover over USD 2 trillion of commercial credit exposures

The report provides a standardised analysis of important metrics for trade credit insurance

Methodology

Research program

Market data analysis

Definitions

Trade credit insurance

Single-risk and annual policies

Export and domestic policies

Political and business risks

Premiums

Abbreviations

PartnerBASE

Finaccord



2.0 MARKET ANALYSIS

Introduction

Market size, growth and segmentation

The Indian market for trade credit insurance has experienced strong growth since 2009

Almost a half of business-to-business transactions in India are made with deferred payment terms

Over 20% of the trade credit insurance market is due to premiums paid by smaller companies

In part for regulatory reasons, single-risk policies make up a fairly low proportion of the total market

Export trade credit insurance makes up a very sizeable proportion of the total market

The value of exports as a percentage of GDP was virtually the same in 2013 as it was in 2009

Cover for political risks accounts for a fairly substantial proportion of the total market value

Factoring as a complementary / substitute product

India's factoring market fell sharply in 2009 before staging a partial recovery in subsequent years

Underwriter market shares

ECGC dominates the market for trade credit insurance in India

Three international trade credit insurance specialists work in conjunction with local partners

Among brokers, Tata AIG enjoys the most frequent utilisation followed by IFFCO-Tokio

Distribution channels

Agents and direct sales limit the distribution share of brokers...

... and few affinity programs exist through other types of intermediary

Future outlook

Several factors should propel further growth in the market up to 2017

3.0 APPENDIX

Brokers participating in the survey






LIST OF GRAPHICS / TABLES


TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY

Key market data for trade credit insurance in India

1.0 INTRODUCTION

2.0 MARKET ANALYSIS

Gross written premiums for trade credit insurance in India, 2009 to 2013

Premium income paid by small companies with an annual turnover of less than USD 5 million as a proportion of the total market for trade credit insurance in India, 2013

Premium income paid for single-risk policies as a proportion of the total market for trade credit insurance in India, 2013

Premium income paid for export trade credit insurance as a proportion of the total market for trade credit insurance in India, 2013

Values of exports and imports and split of GDP by sector in India, 2009 to 2013

Premium income paid for political risk cover as a proportion of the total market for export trade credit insurance in India, 2013

Total factoring market value in India, 2008 to 2012

Estimated market shares of gross written premiums of trade credit insurance underwriters in India, 2013

Frequency of usage of specific trade credit insurance underwriters by brokers in India, 2013

Major banks offering trade credit insurance in India: operating models and partnerships, 2014

Forecast gross written premiums for trade credit insurance in India and the proportion due to export trade credit insurance, 2017

Forecast segmentation of gross written premiums in India between domestic and export trade credit insurance, 2017 (table)

3.0 APPENDIX

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