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, has announced the signing of a $42 million Facultative Reinsurance Agreement with the Saudi EXIM Bank.
The agreement aims to provide support for trade transactions through a Documentary Credit Insurance Sub-Policy Limit in favour 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 up to 70% of Saudi EXIM Bank’s exposure under a Documentary Credit Insurance Policy Commercial and Political Risks (Multi Risk) issued to the Original Insured, within the agreed Credit Amount Limit.
The Sub-Policy will enable coverage of Letters of Credit (LCs) confirmed by Riyad Bank for several Saudi commercial banks, providing additional headroom capacity to support trade transactions for commercial banks in Saudi Arabia and ICIEC Member States.
The collaboration between ICIEC and Saudi EXIM Bank has shown consistent growth over the years, with the current reinsurance agreement valued at approximately $140 million.
In 2023, Saudi EXIM Bank was honoured as the recipient of the ICIEC Awards for the “Export Credit Agency of the Year 2023” category. The award recognises Saudi EXIM Bank’s significant contribution to diversifying the Kingdom’s export base and its support for intra-OIC (Organization of Islamic Cooperation) trade.
As of the end of 2022, Saudi EXIM Bank has provided financing and insurance services to exporters amounting to over $2.5 billion, showcasing its commendable commitment to achieving the objectives of Saudi Vision 2023, the bank said.