History of EGAP
The formation of institutions for export support was an inseparable part of the transformation of the Czech economy at the beginning of the 1990s. The Export Guarantee and Insurance Corporation (EGAP).
After the establishment of the independent Czech Republic, EGAP was transformed into a joint-stock company owned by the Czech state, while its shareholders rights are exercised by the Ministry of Finance of the Czech Republic, the Ministry of Industry and Trade of the Czech Republic, the Ministry of Foreign Affairs of the Czech Republic and the Ministry of Agriculture of the Czech Republic.
In 1995 the Czech Export Bank (CEB) was founded as a subsidiary of EGAP for preferential financing of export credits. In the same year, Act No. 58/1995 Coll. on insuring and financing export with state support was adopted. Insurance funds for the insurance of political risks defined by this Act were gradually replenished both from the state budget and increasingly from EGAP's own resources, thus raising the insurance capacity of EGAP. A significant development in business activities came about in the insurance of political risks as well as of short-term commercial risks.
EGAP became an important part of the financial system of the Czech Republic and, simultaneously, EGAP became actively involved in activities of the Berne Union (International Union of Credit and Investment Insurers). In April 1998, after a 2-year period as an observer, EGAP became its regular full member as the first institution of this kind from a country of Central and Eastern Europe. At the same time, EGAP as a representative of the Czech Republic, began to participate in activities of the OECD Consensus in an aim to gain membership in the so called group of Participants. The Czech Republic became a member of the group of Participants in 2001. These activities have brought access to extensive information databases and intensive exchange of experience with foreign partner institutions.
On 14 to 18 October 2002 Prague hosted the Annual Meeting of the Berne Union. EGAP was the first credit insurance company from among member countries from the Central and Eastern Europe which was a host to such a prestigious meeting.
The Czech Republic became a member of the European Union on 1 May 2004. Given that throughout its existence EGAP consistently observed the international rules of the insurance of export credits, the harmonization of Czech regulations in connection with accession to the EU was more or less a formal act. Nonetheless, much has changed for EGAP. First of all, it is not required just to passively accept rules, but it may actively participate in their development. Its position to the OECD also had changed. While previously the Czech Republic was an individual member, today it is in the same position as other member states of the EU which are represented by the European Commission at discussions and in decision-making processes of the OECD Consensus. The common position of the EU Member States for meetings of Participants of the OECD Consensus are formed at regular coordination meetings in Brussels.
In January 2005, the general meeting of EGAP decided to establish a subsidiary and transfer commercial insurance to its area of responsibilities. The subsidiary started its activities under the business name of Commercial Credit Insurance Company EGAP (KÚP) on 1 October 2005. The founding of the subsidiary was in response to stricter EU rules requiring a transparent separation of insurance with state support from commercial activities.
On 18 April 2007, the Czech government approved the winning bid for the sale of 66% of the share held by EGAP in KÚP to the strategic partner, submitted jointly by the Belgium credit insurance company Ducroire - Delcredere SA. N.V. and Italian credit insurance company SACE BT SpA (Ducroire & SACE) in a public procurement project. The process of entry of the strategic partner into KÚP was formally finalized on 11 October 2007 by taking over a 66% parcel of shares. The aim was to integrate KUP into a large and financially strong international group in order to further develop services for Czech exporters and strengthen positions not only in the Czech market but also in the Central European market.
Two years later the majority share was transferred fully to the Belgian partner and EGAP is still a minority shareholder, allowing it to use synergies between market insurance of uninsurable and insurable export risks. This option becomes especially significant during periods of economic and financial crisis, when the uncertainty and increased risk in some territories and sectors may negatively affect the ability of commercial insurance companies to accept new risks.
In 2010 KÚP was renamed to KUPEG Credit Insurance, a.s.