In line with the market requirements, ECGC is in the midst of launching new products. Says chairman & managing director P M A Hakeem, "By the end of this July we will be launching our new policy targeted at the software exporters."

Software exporters face unique risks like intellectual property, visa/immigration issues like name sounding similar to banned persons. "We have identified such risks and tailored our policy," he adds.

The other product that is in the pipeline is the policy for consignment exporters (Indian companies that ship goods to their overseas warehouses). According to Hakeem, the company recently launched a policy to cover risks involved in project exports targeting domestic companies that win overseas construction projects.

ECGC has also expanded its distribution network by opening eight branches taking the total number to 38 branches.

Last fiscal the company booked a total premium of Rs444 crore and an investment income of Rs120 crore. The profit before tax stands at Rs93 crore.

However the high losses under the credit guarantee to banks (Rs400 crore) and the insolvency of overseas buyers (Rs55 crore) resulted in ECGC booking an underwriting loss (simply put, premium minus claims paid and expenses).

Queried about the availability of reinsurance cushion to reduce ECGC''s losses Hakeem says that the company reinsures some part with the national reinsurer General Insurance Corporation of India (GIC).

According to GIC''s managing director, P B Ramanujam, "Apart from the 20 per cent obligatory reinsurance cession to us, ECGC has got a standing reinsurance treaty agreement. Some of the high value risks are insured on case to case basis."

However large part of ECGC risks are not reinsured because of the risks involved.

Referring to the competition that also does some credit insurance business executive director S Prabhakaran says, "They accept a risk only after reinsurers show the green signal. We cannot adopt the same attitude, as our mandate is to promote Indian exports. Many corporates who experimented with the new players are back into our fold."

The absence of reinsurance facility impacts the corporation in a different form. Given the export credit insurance industry norm to have two per cent of their total risk as their capital base, ECGC has to bring in additional capital.

The Rs500 crore equity based company is looking for the central government to put in another Rs300 crore. "The Cabinet Committee on Economic Affairs has approved the equity contribution. We will soon get the money," remarks Hakeem.

"However ECGC," adds Prabhakaran, "is betting on the Securitisation Act 2002. When the banks are able to recover their dues we will able to realise our dues."

According to Hakeem the bancassurance deals with nine banks and the insurance tie up with the country''s second largest general insurer-National Insurance Company Limited- are progressing well.