COTONOU, 16 April 2014 – The African Trade Insurance Agency (ATI), the Pan-African insurer specialising in investment and trade credit insurance, announced today during a press briefing, the availability of their products in Benin. ATI, which is supported by the World Bank and the African Development Bank, is the highest rated insurer in Africa with an ‘A/Stable’ rating from Standard & Poor’s.
As the first West African member country to join ATI, Benin can now also benefit from these products. Benin will be able to leverage its subscription fee to add $100 million worth of insurance capacity to the market.
ATI, which is owned by African governments, launched in 2001 to help countries attract investments and to increase trade by providing Investment insurance (also called political risk insurance) to investors and trade credit insurance to protect companies against non-payment risks. In 2013, ATI supported transactions in its member countries worth 2.6 billion and cumulatively, the company has supported trade and investment transactions in its member countries valued at $13 billion.
“ATI is much more than an insurance company. In our member countries, we operate more like a national company created to promote their exports and to help them attract investments. These services are accessible in developed countries usually through national export credit agencies such as Coface in France. Historically, these companies have helped developed markets increase their exports, investments and even their influence globally. Ideally, this is the function that ATI serves for Africa and now Benin, will also become an important beneficiary,” noted Kodjo Attaty, the ATI Underwriter responsible for the Benin market.
Banks in Benin are expected to be among the biggest beneficiaries of ATI’s products. Since launching a unique product designed to cover a bank’s entire portfolio of loans against payment default risks, banks have become ATI’s major clients, representing 80% of its client base. This product has allowed banks to lend more to sectors that have often proven difficult either because they lacked the financial information needed to give the bank security or because their transactions had a level of risk that the bank did not have room to absorb. With ATI’s products, banks operating in other regions of Africa have been able to increase their lending volumes to the vital SME sector.
Insurance companies will also be in a winning position with ATI’s presence. The company is mandated to help increase the insurance capacity in local markets through its network of international insurance partners. “It is important to note that we do not compete with local insurance companies because the services we provide are not typically offered in these markets. Instead, our objective is to support companies and to help them increase their capacity so they can offer a wider range of products to their clients, added Mr. Attaty”
The government of Benin is also expected to benefit from ATI’s presence. “When governments want to improve their infrastructure, they often turn to international contractors for goods and services and to investors for financing. In both cases, these companies typically want reassurances that political risks will not get in the way of their business – these risks can involve government seizures of their assets, a government’s refusal to pay or delay payment for goods or services, political instability that causes business disruption, damage or closure and a range of other risks. ATI has helped governments neutralise such risks to attract necessary goods, services and investments for the successful completion of their priority projects and we look forward to doing the same in Benin,” commented Mr. Attaty.
