1. 0 IMPACT OF EUROZONE RECESSION FOR THE CREDIT INSURANCE INDUSTRY Selin ÇALIŞKAN Deputy Manager JOINT PAM/UNECE/UNCTAD CONFERENCE Geneva, 30-31 May 2013

2. 1 SHORT TERM EXPORT CREDIT INSURANCE Initiated in 1989 Provides commercial and political risk cover Whole and some turnover policy Coverage: 90% in principle Maximum credit length: 360 days 238 on-cover countries at present Pre and post shipment coverage available Premium rates set according to the seven-grade country risk classification, along with credit length, payment term and legal status of buyer Operating profitably since its inception with reasonable loss ratios Cooperation Agreements with 11 leading commercial banks

3. 2 SHORT TERM EXPORT CREDIT INSURANCE 20112012 Covered Business (billion USD) 5.756.92 Premium Accrued (million USD) 2123 Paid Claims (million USD) 7.27.7 Recoveries (million USD) 1.5 Premium Rate on Average 0.36%0.33% Total Policy Holders 1,2321,496 Total Buyers 166,180181,195

4. 3 REGIONAL BREAKDOWN OF INSURED EXPORTS 20112012

5. 4 SECTORAL BREAKDOWN OF INSURED EXPORTS 20112012

6. 5 EFFECTS ON THE DEMAND OF CREDIT INSURANCE Increase in covered shipment to EU countries and emerging markets Year Turkey’s Total Export (billion USD) Turkey’s Total Export to EU Countries (billion USD) Total Covered Shipment (billion USD) Covered Shipment to EU Countries (billion USD) 2010113.8852.684.993 2011134.9162.355.755.753.47 2012152.5059.206.923.87

7. 6 EFFECTS ON THE DEMAND OF CREDIT INSURANCE Decrease in share but not as significant as the percentage fall in Turkey’s export to EU countries Year Turkey’s Export to EU Countries (%) Insured Export to EU Countries (%) 20104660 20114661 2012393956

8. 7 EFFECTS ON THE DEMAND OF CREDIT INSURANCE Increase in covered shipment to Mediterranean countries but decrease in share Year Total Covered Shipment (billion USD) Covered Shipment to Mediterranean Region (billion USD) Insured Export to Mediterranean Countries (%) 20104.991.5531 % 20115.755.751.5827 % 20126.921.8126 %

9. 8 EFFECTS ON THE DEMAND OF CREDIT INSURANCE Need for new potential markets instead of EU Countries Higher awareness of the need for export credit insurance Higher demand towards insurance

10. 9 INSURED EXPORTS (2007-2012)

11. 10 CLAIMS (2007-2012)

12. 11 EUROZONE-CLAIMS 5 Buyers in “Top Ten Claims” belong to Eurozone countries. 8 Buyers in “Top Ten Claims” belong to European countries. Most of them are paid during the Eurozone recession.

13. 12 EUROZONE INSURED EXPORTS-CLAIMS 200720082009201020112012 INSURED EXPORTS (USD Billion) 1.92.21.82.12.32.6 CLAIMS (USD Million) 1.82.25.38.24.34.2

14. 13 EURO-MEDITERRANEAN REGION

15. 14 IMPACT ON RISK CLASSIFICATION & PRICING More cautious and conservative approach in underwriting Change in cover conditions Increase in premium rates in mostly affected European countries

16. 15 RISK MITIGATION STRATEGY AGAINST EUROPEAN CRISIS Change in risk mitigation strategy Monitoring the existing limits frequently Utilizing other sources of information

17. 16 THANK YOU!