Book Description

GAO surveyed present and former Foreign Credit Insurance Association (FCIA) members, policyholders, insurance brokers, and private underwriters of export credit insurance to obtain information on the Export-Import Bank (Eximbank) Export Credit Insurance Program. GAO found that: (1) exporters' reasons for obtaining export credit insurance included a desire to expand export activities, concern about the risk of exporting to foreign countries, and the need to secure bank financing; (2) financial institutions included political risk, clients' needs, and commercial risk as primary reasons for obtaining the insurance; (3) 40 percent of the exporters and 78 percent of the financial institutions knew of alternatives to FCIA for export credit insurance, but chose FCIA because they had more confidence in it; (4) policyholders were generally satisfied with FCIA services; and (5) 32 percent of the exporters and 10 percent of the financial institutions stated that they needed higher coverage limits in 1986 than they received from FCIA. GAO also found that: (1) most former FCIA policyholders terminated their FCIA coverage because they no longer needed it; (2) former FCIA members indicated that their overall loss caused them to leave FCIA and they would not renew participation in the program unless they could expect to make a profit; and (3) private insurers generally used a different underwriting approach than FCIA, had less insurance capacity, and believed that the federal government should be active only in those areas of the insurance market where they were not.