The Development Bank started looking into the issue of setting up its own insurance company as it was unhappy with the export insurance tariffs. This is relevant for the Bank also because it is a major shareholder of the national leasing operator Promagroleasing.
Currently, Eximgarant of Belarus provides insurance coverage for export in Belarus. According to the Development Bank, in some cases the company's tariffs are unnecessarily high. This leads to difficulties in the implementation of export deals. Eximgarant was requested to reconsider its tariff policy.
"So far the insurers have not been very flexible in dealing with the request," the Development Bank said. Therefore the Bank has started looking into the issue of setting up its own company for export insurance, in particular leasing. There are financial and institutional capabilities for that.
The creation of such a company would be in line with international practice. "Development banks of Russia, Kazakhstan, and China operate affiliated insurance companies that are primarily engaged in insurance of exports," the Bank said. In particular, in 2012 Russia seriously strengthened EXIAR, the insurance company of Vnesheconombank, and started using it to implement its export promotion strategy. Belarus decided to do the same, and created a competitor to Eximgarant of Belarus. The healthy competition should benefit all: consumers in part of lower tariffs, the country in part of increased exports.
In addition, in June, the Bank's Supervisory Board approved the development strategy for three years. It provides for the opportunity to participate in the management of the insurance company.
However, setting up a company is not an easy business, the Development Bank said. "In the best case by the end of the year we will be able to say whether we need it in principle. Or probably we will be able to come to agreement with Eximgarant in part of a more flexible tariff policy. Then we will be able to take a decision on the timeframe for a new company," the Bank informed.
Read the full story.
BELARUS: Development Bank of Belarus to decide on its own insurance company by year-end
21920 views
