New commitments to insure investment, finance, and exports destined to Arab countries increased by 17% in 2023 to exceed $121 billion, which made the insured imports reach 9% of the total Arab merchandise imports during the same year, according to a report by The Arab Investment & Export Credit Guarantee Corporation (Dhaman).

Meanwhile, the value of outstanding insurance commitments for investment, finance, and exports destined to the Arab region rose by 7% to roughly $260 billion by the end of 2023, making up around 8% of the global total.

These commitments included 83% for credit insurance of exports destined to the region, 8% for political risk insurance (worth $22 billion), and 9% for other cross-border insurance commitments.

Dhaman stated that the global trade and investment environment in 2023 encountered many challenges and risks that represented promising opportunities for the insurance industry against political and trade risks, coinciding with the continued geopolitical tensions in the world and in the Arab region.

Furthermore, the Arab countries' share rose to 4% of new global commitments to insure trade, investment, and finance in the world during 2023.

The credit insurance of exports destined to the Arab countries in various terms continued to have the largest share of new commitments with 88%, while insurance against political risks represented 4%, and other cross-border commitments made up 9%.

New insurance commitments were geographically concentrated in five Arab countries, which held about 78% of the total, led by Saudi Arabia with 28%, followed by the UAE with 23% and Egypt with 13%, as well as Morocco and Algeria with 9% and 5%, respectively.

Public export credit insurance agencies continued to hold the largest share of total new commitments in the Arab region in 2023 with a share of more than 62%, while private insurance agencies accounted for about 38% of the total.

Three main sectors, namely infrastructure, energy, and manufacturing, accounted for about 78% of new commitments to insure export credit directed to the region in the medium and long term and to insure against political risks during 2023.

Claims paid for insurance commitments in the Arab region rose by 48% to $713 million in 2023, with recoveries hiking by 23% to $457 million.

Meanwhile, the majority of claims paid for long-term insurance commitments were concentrated in energy and infrastructure sectors with a share of more than 76%.

It is worth noting that Dhaman is based in Kuwait and was established in 1974 as a multilateral institution that comprises all Arab countries and four joint Arab financial institutions. It provides specializsed insurance services against credit and political risks with a view to facilitating the inflow of foreign direct investments into Arab countries and promoting Arab exports and imports.

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