Rating agency ICRA has reaffirmed iAAA claims paying ability rating of Export Credit Guarantee Corporation of India (ECGC). The rating indicates highest claims paying ability and a fundamentally strong position and prospect of meeting policyholder obligations is the best.
The rating factors in the sovereign ownership (100 per cent owned by the Government of India, GoI) and the financial support from the GoI in the form of regular capital infusion.
"The rating also considers ECGC's significant role in meeting the GoI's strategic objective of promoting exports; its long track record of business operations; market leadership in the country's export credit insurance industry; adequate claims management processes; and an experienced management team," ICRA said.
The rating derives comfort from the entity's large investment portfolio invested in liquid and predominantly safe asset classes, it added.
"While ICRA takes note of the higher claims paid by the company in the last two years and the consequent deterioration in its underwriting profitability, these concerns are adequately mitigated by the company's sovereign ownership and its policy role as an export credit insurance agency.
"While ECGC has been able to maintain its market position after deregulation of the sector, the low penetration of credit insurance in India continues to constrain incremental growth," the rating agency said in a statement.