Business results of EGAP in 1992-2007

The insurance of export credits with state support dominated over the commercial insurance of short-term receivables in the first years of EGAP’s operation. The charts next to this article show there is a fundamental difference between both types of the insurance. While volumes in the commercial insurance have been growing at regular pace depending on success of own business activities of EGAP, results of the insurance with state support in individual years were significantly influenced by success rate of Czech exporters in acquiring large export contracts. The widening of the offer by the insurance of domestic receivables in the commercial insurance and the insurance of credits for the pre-export financing of the production for the export and of bank guarantees for obligations of exporters which have been in EGAP’s offer since 1998, have had positive influence on growth trends of the insurance. The best results so far in the insurance with state support in 2001 were a primarily consequence of the insurance of credits and bank guarantees related to deliveries for the power plant Shen Tou in China. However, as soon as in the following year, the full impact of stagnation and recession were felt both in EU countries and in a number of developing countries as well as decline in investment activities in the world as a result of worries about terrorist attacks. In 2003, EGAP was able to renew growth dynamics. In this year, compared with 2002, the annual percentage growth of the insured volume was twice as high than the growth rate of Czech exports and roughly 7 times higher than the growth of the GDP. It was possible to keep this trend also in following years as a result of growing ability of the Czech exporters to win foreign markets with EGAP’s assistance and to win again large contracts, and on the other hand as a result of increased marketing activities of EGAP bringing in a substantial growth in the number of clients. The volume of commercially insured receivables exceeded for the first time and also permanently the insurance with state support in 2000. Out of the total of the commercially insured volume, approximately one quarter fell to domestic receivables in that year. Today, the shares of the insured domestic and export receivables are practically equal. A great impulse for further development of the commercial credit insurance was introduction of direct electronic communication with clients “EGAP on-line” (EOL) in December 2003. It brought significant savings in quantity of work, lowered administrative burden and considerably increased comfort of clients. In order to separate entirely and transparently commercial insurance from the insurance with state support and to create preconditions for entry of a foreign strategic partner, EGAP outsourced the insurance of short-term receivables into a subsidiary “Commercial Credit Insurance Company EGAP” which started its independent operation on October 1, 2005. Since 2000, beside insured volumes and other standard indicators, EGAP has been reporting on an annual basis the total worth of supported Czech export which reflects strong multiplication effect of the insurance with state support and which enables a complex view on EGAP’s activities.

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