“Dhaman”: $121 billion worth of trade, investment and finance insurance operations in Arab countries during 2023

The Arab Investment & Export Credit Guarantee Corporation (Dhaman) announced that 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.

In a press release on the occasion of issuing the third quarterly bulletin “Dhaman Al-Istithmar” for 2024 issued at its headquarters , 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. Therefore, new commitments to insure investment, finance and exports destined to Arab countries increased by 17% in 2023 to exceed $121 billion, so that the insured imports reached 9% of the total Arab merchandise imports during the same year.

In the context of Dhaman’s endeavor to study, follow up and monitor the evolution of the trade, investment and finance insurance sector globally and regionally in cooperation with Berne Union, the data of the sector's performance in the Arab region revealed several facts, most notably the following:

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 (28%), followed by the UAE (23%), Egypt (13%), Morocco (9%), and Algeria (5%). 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. The majority of claims paid for long-term insurance commitments were concentrated in energy and infrastructure sectors with a share of more than 76%.

In light of the continued challenges resulting from the escalation of geopolitical tensions in several regions around the world, Dhaman seeks to enhance its comprehensive capabilities to address existing and potential political and economic challenges in the region, and is keen on strengthening its alliances with key regional and international players in the industry, led by Berne Union and Aman Union, and all stakeholders in the region and the world, the press release emphasized.