“Korean
firms are the driving force behind the Korean economy and K-SURE
is always there for them in their endeavor to spread their wings
toward global trade.”
What
K-SURE does.
Established
in July 1992, the
Korea Trade Insurance Corporation (K-SURE) is
the country's official export credit agency
under the Ministry of Trade, Industry, and Energy.
The mission of its 490 employees is to boost national competitiveness
through promoting trade (export and imports) and overseas
investment by Korean enterprises.
As is often the case for ECAs, K-SURE's operations are backed by a
national Trade Insurance Fund. Any profits of the fund shall be
reserved in full. Losses shall be covered either through reserve
amounts or, if not sufficient, through government indemnifications.
Products
Financials
The business is increasing.
Over
the past years, insurance premium income
has increased steadily. Recently,
reinsurance activity has increased,
but still at a very low scale.
Nevertheless, total operating
income decreases,
basically due to
a declining recoveries income.
K-SURE
makes losses.
According
to Art. 4 of the Korean Trade Insurance Act, insurance premia should
be set to maintain the balance of earnings and
expense of the trade insurance business. This
doesn't seem to work out very well, if you consider that K-SURE is
constantly making losses.
As
you can expect from any subsidized activity, such losses are
compensated for by higher contributions
(namely from the Korean Government).
K-SURE's
Risk Management Scheme
Let's
finish with another great example of why I love organizational
design, especially in public administrations:
Risk
is analyzed, reviewed, managed, and underwritten by divisions,
departments, and committees. Luckily, there is an audit office that
keeps an eye on all this...
Resources:
