ECIC IR 2023

Integrated Report 2023

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E X P O R T C R E

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The reduction in the earned premiums in the 2023 financial year by R274 million (54%) was as a result of the deterioration of the internal sovereign credit risk for the GoG. The reduction in the 2022 financial year was due to the portfolio becoming highly concentrated in high risk-rated countries and projects following the prepayment of the insured loan by one of our big projects. The reduction in the earned premiums and the raising of the IBNRs both in the 2023 and 2022 financials years resulted in underwriting losses.

The IBNR which was raised in the 2022 financial year was paid in the current year. The investment (R278 million) and IMU incomes (R150 million) which reduced the underwriting losses in the current year from R 1.4 billion to R 971 million were netted of by foreign exchange loss (R612 million) thus resulting in the loss after tax of R1.5 billion for the year. The loss after tax was reduced by currency translation gains to a R40 million loss.

Operating expenditure (R Millions)

35%

700

30%

600

29%

25%

500

23%

20%

20%

400

15%

300

10%

200

5%

100

0%

0

2021

2022

2023

3 yr average earned premiums (excl CRR, incl assessment fees and commission received) Operating expenditure including bonus provision

Cost to income ratio % (rhs) Cost to income ratio % (rhs)

Figure 9: Operating expenditure

Management continues to run the Corporation in a cost-efficient manner, and the cost to income ratio continues to be below the targeted ceiling of 32%.

YOUR EXPORT RISK PARTNER

92