A trade summit held at the Address Hotel Dubai Mall brought the likes of Euler Hermes to town. Pictured is chief economist and director of economic research for Euler Hermes, Ludovic Subran. Lee Hoagland / The National
A trade summit held at the Address Hotel Dubai Mall brought the likes of Euler Hermes to town. Pictured is chief economist and director of economic research for Euler Hermes, Ludovic Subran. Lee HoaglShow more

Egypt and Syria hit as insurers seek to lay off Middle East risk



Volatility in Egypt and Syria is prompting trade credit insurers to limit cover as they seek to avoid multimillion-dollar payouts linked to elsewhere in the region.

It follows more than US$100 million of claims paid last year related to Iran and about $140m the year before in Libya, according to the Berne Union, an association representing global credit and investment insurers.

“We have some concerns for the future. Parts of the [Middle East and North Africa] region are politically volatile and we are concerned about the potential spillover of that to the now healthy parts of the Mena region,” said Robert Nijhout, the executive director of International Credit Insurance & Surety Association, another body that represents insurers around the world.

Alongside Mena, southern Europe and parts of Africa and South America were also potentially risky areas, he said. Still, the outlook for growth in the region was positive, he added.

Offered by special insurers, banks and government-backed export credit agencies, trade credit insurance covers sellers of goods and services against the risk of non-payment by customers both at home and abroad. Demand for the insurance in the region is taking off as companies seek to improve their ability to cover risks.

Such risks flared in the region in 2011 when a revolution and foreign military action in Libya prompted a clutch of big claims by oil majors and other foreign companies who had been left unpaid.

International sanctions against Iran prompted more payouts last year as Iranian buyers struggled to pay foreign sellers of goods amid a slump in the value of the currency.

“We are in a situation today where the Iranian buyers say ‘we would like to pay but no one is accepting our payment’ so the credit insurers then have to indemnify and they are then trying to recover the money from the Iranian buyers,” said Fabrice Morel, the deputy secretary general of the Berne Union.

As yet, no big claims had been paid out linked to Egypt as insurers reduced their exposure, he said. But volatility had intensified since the removal of Mohammed Morsi as president in a July uprising .

“It is an explosive situation and it might well be that we see claims coming from this country in the future,” said Mr Morel.

Euler Hermes, the largest trade credit insurer in the world, experienced a 20 per cent rise in claims in the region last year, said Mahan Bolourchi, the head of risk, information and claims in the GCC and Middle East for the company. The increase in claims was still below the firm’s annual regional revenue growth of 55 per cent.

Along with other international insurers such as Coface and American International Group, it has strengthened its presence in the region to tap into surging flows of trade, particularly in the UAE, a major transshipment hub.

Euler Hermes is limiting new exposure in Egypt and Libya and not providing any cover currently in Syria or Iran.

“In Egypt, the risk is that no one will be held accountable for the dues,” said Ludovic Subran, the Euler Hermes chief economist. “In terms of the private sector buyer, the risk is a little different. The risk is that there’s very little cash left in the country.”

Euler Hermes has been encouraging GCC countries to explore new export markets in some parts of the Mediterranean such as Morocco and Tunisia.

tarnold@thenational.ae

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Director: Vasan Bala
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Rated: 3.5/5
if you go

The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow. 
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes). 

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Started: September 2023
Founder: Muhammad Khalid
Based: Abu Dhabi
Sector: Generative AI
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
 
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How to help

Donate towards food and a flight by transferring money to this registered charity's account.

Account name: Dar Al Ber Society

Account Number: 11 530 734

IBAN: AE 9805 000 000 000 11 530 734

Bank Name: Abu Dhabi Islamic Bank

To ensure that your contribution reaches these people, please send the copy of deposit/transfer receipt to: juhi.khan@daralber.ae

What you as a drone operator need to know

A permit and licence is required to fly a drone legally in Dubai.

Sanad Academy is the United Arab Emirate’s first RPA (Remotely Piloted Aircraft) training and certification specialists endorsed by the Dubai Civil Aviation authority.

It is responsible to train, test and certify drone operators and drones in UAE with DCAA Endorsement.

“We are teaching people how to fly in accordance with the laws of the UAE,” said Ahmad Al Hamadi, a trainer at Sanad.

“We can show how the aircraft work and how they are operated. They are relatively easy to use, but they need responsible pilots.

“Pilots have to be mature. They are given a map of where they can and can’t fly in the UAE and we make these points clear in the lectures we give.

“You cannot fly a drone without registration under any circumstances.”

Larger drones are harder to fly, and have a different response to location control. There are no brakes in the air, so the larger drones have more power.

The Sanad Academy has a designated area to fly off the Al Ain Road near Skydive Dubai to show pilots how to fly responsibly.

“As UAS technology becomes mainstream, it is important to build wider awareness on how to integrate it into commerce and our personal lives,” said Major General Abdulla Khalifa Al Marri, Commander-in-Chief, Dubai Police.

“Operators must undergo proper training and certification to ensure safety and compliance.

“Dubai’s airspace will undoubtedly experience increased traffic as UAS innovations become commonplace, the Forum allows commercial users to learn of best practice applications to implement UAS safely and legally, while benefitting a whole range of industries.”

The specs

  Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now

The specs
 
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Transmission: Eight-speed auto
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Price: From Dh330,000 (estimate)
Milestones on the road to union

1970

October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar. 

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.

1971

March 1:  Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.

August 6:  The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.

August 15: Bahrain becomes independent.

September 3: Qatar becomes independent.

November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.

November 29:  At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.

November 30: Despite  a power sharing agreement, Tehran takes full control of Abu Musa. 

November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.

December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.

December 9: UAE joins the United Nations.

COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding