The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a Shariah-compliant multilateral insurer and member of the Islamic Development Bank (IsDB) Group, announced the signing of a $42 million Facultative Reinsurance Agreement with Saudi EXIM Bank.
The agreement aims to provide support for trade transactions through a Documentary Credit Insurance Sub-Policy Limit in favor of Riyad Bank.
This Sub-Policy comes as an extension of the master Facultative Reinsurance Agreement (FRA) signed by the two entities in 2021.
Under the terms of the agreement, ICIEC will provide Shariah-compliant reinsurance, covering 70% of Saudi EXIM Bank’s exposure under the Documentary Credit Insurance Policy Commercial and Political Risks (Multi Risk) issued to the Original Insured, within of the agreed Credit Amount Limit.
The Sub-Policy enables the coverage of Letters of Credit (LCs) confirmed by Riyad Bank for some Saudi commercial banks, providing additional headroom capacity to support trade transactions for commercial banks. banks in Saudi Arabia and ICIEC Member States.
The collaboration between ICIEC and Saudi EXIM Bank has shown steady growth over the years, with the current reinsurance agreement worth approximately $140 million.
In 2023, Saudi EXIM Bank was honored as the recipient of the ICIEC Awards for the “Export Credit Agency of the Year 2023” category. The award recognizes Saudi EXIM Bank’s significant contribution to diversifying the Kingdom’s export base and its support for intra-OIC (Organization of Islamic Cooperation) trade.
Until the end of 2022, Saudi EXIM Bank has provided financing and insurance services to exporters amounting to more than $2.5 billion, which shows its commendable commitment to achieving the goals of Saudi Vision 2023, the bank said. .