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Click here |
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Toll Free
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800 Dubins (382467)
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Dubai |
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971 4 2693030
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AbuDhabi |
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971 2 6725572
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Fax |
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971 4 2693727
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EMAIL : info@dubins.ae |
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FINANCIAL LINES
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With growing sophistication of commercial enterprises in the MENASA region, businesses are facing hazards which require more sophisticated risk management responses.
DIC is responding to this need by bringing underwriting capabilities and capacities from across the international insurance markets to respond to these needs. |
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Spearheading this initiative is Dubai Insurance's Financial Products Department. Its portfolio of insurance products, current and future is dedicated to protecting MENASA businesses from unconventional financial & operational risks which are faced both domestically & internationally.
To date, the department offers insurance products in the fields of:
All level plans include access to worldwide emergency assistance, outpatient cover, inpatient cover and day patient cover and grant you the access for comprehensive cover that comprise but not limited to:
- Political Risk Insurance
- Residual Value Insurance
- Project Guarantees & Credit Enhancement
- Comprehensive Credit Insurance
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Title Insurance
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Transurance & Professional Indemnity including: D&O Liability, Professional E&O, Bankers Blanket Bonds, Employer Practices Liability, and Fiduciary Liability.
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• POLITICAL RISK INSURANCE
This coverage protects any business involved in international trade and/or investment against any government actions or lack thereof which cause the business a loss.
CEND POLICIES
Protect a business which maintains assets in foreign countries (permanent or mobile) against a host country's government which confiscates, expropriates, nationalizes or deprives the owner of the assets of any right which had been granted to it at the time of the investment.
CONTRACT FRUSTRATION POLICIES
Protect businesses entering into international export, import or service contracts, where the contract is cancelled or frustrated in any other way by the host government – cancellations of previously granted licenses and permits, non-payments of dues, non- honoring of settlements determined in accordance with conflict resolution clauses in the underlying contracts.
UNFAIR CALLING OF DEMAND BOND POLICIES
Protects the international business against the calling of bonds, whether these are Bid Bonds, Advance Payment Bonds or performance Bonds, by host governments when the business has complied with all underlying conditions.
Insurance capacity in the market for acceptable risks can total up to as much as a couple of hundred million U.S. dollars for CEND risks. For other risks total capacity can be as high as USD 50 million.
POLICY PERIODS
usually do not extend beyond 3 years, but for contracts could be as long as 5.
PREMIUM RATES
are generally lower for CEND policies (usually less than 1 percent p.a.) than contract related policies which can be as expensive as 4 to 5 percent p.a. on outstanding exposures (effectively lowering the rate over the life of the contract).
Premium rates are subject to changes depending on the macro-economic and geo-political conditions in the Host country, as are the underwriting acceptabilities of countries.
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• RESIDUAL VALUE INSURANCE
This insurance is to protect the insured from a decrease in market value of a properly maintained asset (defined contractually) at a defined point in time.
The Insurer's liability is limited to the difference, if any, between the asset’s market value and its guaranteed price at a specific point of time.
Pre-mature sale of the asset or a physical loss event centered about the asset, causes this policy to lapse (with no refund of premium).
This insurance has many applications which benefit the Insured, including
- Liquidity to enhance the transactions yield
- Risk Transference – mitigating asset value risk to a lease or loan portfolio
- Enhancing securitizations by converting residual value risk to a rated risk
- Reserve requirement/capital allocation management
- Enable finite risk structures to rationalize pricing of assets subject to abnormal market fluctuations
Irrespective of the asset type, each submission‘s underwriting is based on:
- Position of the Asset at the end of the policy period vis-a-vis the projected market cycle;
- Maintenance & return condition;
- Consideration of a secondary market;
- Economic Cycles;
- Projected Values based on stress models
- Policy terms which could be as long as 10years
Rates for market residual value cover vary significantly, depending on:
- Type of asset/projected aftermarket
- Age at residual value point
- Coverage as a percent of forecasted value
- Range of rates often between 1.5% and 4% p.a of amount covered
- Rates for “collateral†residual coverage substantially higher than marketes for the same asset due to credit risk, multiple residual point
- Insurer requires right (not obligation) to purchase asset in event of a claim
- Underwriting almost always requires at least one 3rd parties Appraisal Report.
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• PROJECT GUARANTEES & CREDIT ENHANCEMENT
Project Financing can comprise
- Securitizations & other Non-recourse lending
- Off-take agreements
- Off-balance sheet funding
- Multi-party structured financings and
- Quasi-government guarantees.
As part of the project funding process, financial product policies which can enhance the credit of projects can, depending on the risks perceived by financiers, include
- Output guarantees
- Income stream guarantees
- Residual value guarantees
- Credit guarantees
- Political risk guarantees
When these policies are used for credit enhancement salient features include
- Policy Terms concurrent with period of financiers risk
- Pricing often determined by spreads available in capital markets for similarly profiled risks
- Insurance often has advantage because of the capital markets inherent inability or reluctance to restructure risk
- Insurance solutions also may have accounting & regulatory benefits to their solutions
Underwriting requirements for acceptance of any submission
- Submission clearly understood as explained by source of submission
- Info verifiable directly with original client
- Sufficient data available to be subjected to detailed numerical & statistical analysis
- Sufficient allowance for clients skin in the game so interests are aligned
- May require input from consultants specializing in the industry.
Some of the de rigueur analysis of a submission to include
- Due diligence of all involved parties including Operating and financial history and legal ownership structure
- Study of characteristics of underlying asset(s)
- Data on volatility, loss & delinquency history
- Study of industry & its various players including alternative servicers, if needed
- 3rd party feasibility study including vetting parties credentials
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• COMPREHENSIVE CREDIT INSURANCE
While Dubai Insurance has some appetite and capacity to offer for this cover, whole turnover policies can only be issued in conjunction with one of the 3 top credit insurers. Dubai Insurance will use its expertise and contacts to liaise with the Turnover Insurers to assist its clients. However, Dubai Insurance is quite capable to insure single name credits in conjunction with facultative capacity, if an when analysis of the risk’s audited financial statements warrant cover. In certain cases this may require the risk to commit collateral to the benefit of the Company. |
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• TITLE INSURANCE
This insurance assists in the developers marketing efforts when directed to buyers from the West, where Title Insurance is almost a must especially when there is any kind of financing by third parties involved.
- This policy covers against
- defect or lien or encumbrance on the ownership title of the property
- Non-marketability of Title
- Obstacle to Right of Access
- Retroactive violation or enforcement of govt. regulation preventing previously granted rights in respect of the property
- Dubai Insurance offers the Master Policy to the Land Developer, with certificates off the policy for buyers of individual properties within the development;
- There is a one-time premium charge for the life of the ownership
- Premium (usually of less than 1 pct.) is paid at purchase of property and covers the life of such ownership
- The policy will need to be re-underwritten at that stage for the benefit of following owners
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• TRANSURANCE
- Studies have shown that often property loss exceed amount paid by insurance by up to 20% or more no matter how broad the cover
- For major Insureds, i.e. for Insureds who have multimillion properties insured by Dubai Insurance, rather than attempt to define all things that cause the shortfall and require proof, Transurance offers an alternative solution
- It simply pays a specified add’l percentage of the amount paid by the property insurance it references.
- Some of the Collateral Losses unrecoverable could include, which Transurance recoveries could help with are: -
- Loss of Revenue in XS of BI cover
- Discretionary expenses such as
- Legal Costs
- Marketing Expenses
- Increased Insurance costs
- Administrative surcharges
- Recouping some of the deductible in the underlying reference policy
- Proof of loss is just proof of payment by the referenced property insurance
- Proceeds of Transurance are for the Insured to use as he sees fit – no restrictions
- Transurance is a standalone policy, but works like an endorsement to a property policy
- Premium for Transurance is the selected payout percentage multiplied by the referenced property insurance rate
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• PROFESSIONAL INDEMNITY POLICIES
Dubai Insurance is pleased to have entered into a bilaterally exclusive underwriting agreement with Houston Casualty Company, the Texas based S&P AA rated insurer, for the benefit of all insureds based in the GCC and Egypt. Joint capacity allows Dubai Insurance to offer up-to USD 25 mm of capacity for any one risk, and for those policies where there are multi-risks insured, such as combined policies for Financial Institutions where the risks include Directors & Officers Liability, Bankers Blanket Bonds, Electronic Computer Crime etc. capacities available can be as high as USD 40 mm per policy per insured. Pure Professional Liability is offered only in excess of USD 10 mm. |
For further details or assistance, please e-mail us at: info@dubins.ae or contact to
+97142693030 our Dubai Branch.
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