AND ITS ROLE AS INDONESIA'S EXPORT CREDIT AGENCY GTR 5th Annual Indonesia Trade & Commodity Finance Conference INTRODUCTION OF THE "NEW" ASEI AND ITS ROLE AS INDONESIA'S EXPORT CREDIT AGENCY Badruz Zaman 23 April 2015

BRIEF INTRODUCTION AND HISTORY OF ASEI

NEWLY RESTRUCTURED ASEI 3 January 2015 -> ASEI Re officially changed its name to Reasuransi Indonesia Utama (Indonesia Re) 1 July 2014 -> ASEI changed its name to ASEI RE 21 October 2014 -> Asuransi ASEI received its operating license from OJK 18 December 2014 -> ASEI Re spun-off its existing business /portfolio to newly established Asuransi ASEI Will become the “Giant Reinsurer” setup to decrease current account deficit Asuransi ASEI (ASEI) continues/resumes its business and function as the Indonesian ECA

ASEI PORTFOLIO SPREAD (2014) INSURANCE PRODUCTS/ SERVICES ASEI'S BUSINESS PORTFOLIO (SNAPSHOT) INSURANCE PRODUCTS/ SERVICES ASEI PORTFOLIO SPREAD (2014)

CREDIT INSURANCE CREDIT INSURANCE Clients Products Banks or ECAs or Export Credit Insurance Exporters Manufacturers Trading coys Construction coys Distributors Domestic Credit Insurance CREDIT INSURANCE Banks or Non-Bank Financial Institutions (Multifinance) Export Bill Insurance Domestic Credit Insurance Financing ECAs or Local/ Foreign Credit Insurers Reinsurance (Inward)

Export Credit Insurance Domestic Credit Insurance Types of Transactions covered by ASEI Credit Insurance CREDIT INSURANCE Import/investments from any country to Indonesia (Short-term and Medium/ Long term) Exports of goods and /or services (Short-term) Sales of goods and/services to domestic market on credit terms (Short-term and Medium-term) Factoring/invoice discounting facilities provided by banks to exporters/sellers (Short-term) Reinsurance Export Credit Insurance Domestic Credit Insurance EBI/DCIF

PRIVATE CREDIT INSURER Business Purpose/Role ASEI vs Private Credit Insurers (Main Similarities and Differences) NO ASPECT ASEI PRIVATE CREDIT INSURER 1 Business Purpose/Role In accordance with Laws on SOEs no.19/2003 -> Generally contribute to national economic development, and specifically contribute to (non-tax) state revenues Goods and/or services provided must meet the public needs Provide assistances to SMES, cooperatives and the public in general Provide what the private market can't* Make Profit (commercially driven)* In accordance with Government Regulation no 1./1982 -> "To support national non oil & gas exports through export credit insurance and export credit guarantees" Make Profit and Increase Market Share/Lead Market* Contribute to own revenue (unless business is written on State Account) Global business development

PRIVATE CREDIT INSURER ASEI vs Private Credit Insurers (Main Similarities and Differences) NO ASPECT ASEI PRIVATE CREDIT INSURER 2 Business Orientation Main business "Export Credit Guarantees" was initially supported through Government Program but due to high Non-performing loans, Program ceased in 1995 and ASEI started to develop other insurance lines (general insurance, domestic credit guarantees, bonding and reinsurance) Majority of Trade credit insurance portfolio (Export and domestic) still focused on short-term transactions/accounts* (Law of Large Numbers) to balance out medium-long term business Developing Medium-Long term credit insurance and inward reinsurance business through ECA Cooperation* for export, import and domestic transactions -> Infrastructure/powerplant projects Credit Insurance, Bonding and Reinsurance Trade credit insurance portfolio (Export and domestic) only focused on short-term transactions/accounts /marketable risk* unless business is written on State Account Do not write medium-long term business /non-marketable risk (unless business is written on State-Account)

ASEI - ECA COOPERATION SCHEME (POWER-PLANT PROJECT) Badruz Zaman 23 April 2015

PRIVATE CREDIT INSURER (Outward) Reinsurance Support ASEI vs Private Credit Insurers (Main Similarities and Differences) NO ASPECT ASEI PRIVATE CREDIT INSURER 3 Market Credit Insurance: Indonesian Companies/Joint Ventures/ Blue Chip Companies* and other SOEs Reinsurance (Inward): Provided to other ECAs, Foreign Private Credit Insurers, Local Private Credit insurers Indonesian Companies/Joint Ventures/Blue Chip Companies* and Global companies/accounts Provided through local agency/fronting arrangements to Indonesian Insurance Companies 4 (Outward) Reinsurance Support To local reinsurance market (prior to OJK ruling which rules to place/cede credit insurance risk locally, reinsurance was also provided by foreign reinsurance market) Self-Retained or on case-by-case basis ceded to Loyds Insurance Market

CONSTRAINS IN DEVELOPING CREDIT INSURANCE IN INDONESIA

THANK YOU Badruz Zaman 23 April 2015