The investment insurance serves for minimizing risks with investments in countries with higher political risks. You, or the Slovak investor, are the insured in this case.
Investment insurance is used in the case that you are preparing to invest in a country where the political situation is not stable or development of sectors that you are preparing to enter are for different reasons hard to predict. Thus, there is a risk of reducing a profit from an investment in consequence of some unforeseen event. You are the insured and through the insurance you gain the certainty that you will not lose your investment.
When is such insurance most advantageous?
The insurance is suitable primarily with investments of larger financial volumes and longer-term investments.
What is the period of the insurance?
The period of the insurance derives from the length of the investment. This is typically a longer-term obligation of the investor, where the period of investment is longer than 3 years.
What are the basic conditions of the insurance?
• It is a new investment into property shares in an already existing company or an investment into working capital for support of the trading expansion of the company.
• This is the long-term intention of the investor, at least 3 years.
• Company profits are dependent only on the outputs of the foreign company and in the investment revenues.
• The investment is set up in connection with the existing legal order of the host state and the investor and foreign company have obtained the necessary permissions from administrative authorities in the host state.
• Participation in the insurance claim represents minimally 2.5%.
And what about impact on the environment and the social impact of the case?
EXIMBANKA SR respects its international obligations. For this reason with projects with a maturity of the loan longer than 2 years we assess their impact on the environment and the observing of human rights in the communities affected by the project. Evaluation begins with the submitting by the exporter of a filled in questionnaire which is an appendix to the insurance application. After determining the importance of the impact of the export on the environment, we assign your project to one of three categories (A, B, C) and on the basis of this we decide whether the export will be assessed by a professional appraisal of the impact of the export on the environment.
What kind of risks does the insurance cover?
The insurance is focused on non-marketable risks, i.e. those which commercial banks and insurance companies are unwilling or incapable of insuring. The insurance covers:
• the impossibility of a transfer of payments to the Slovak Republic;
• the seizing of a foreign company;
• politically violent acts – war, revolution, civil unrest, terrorist attacks and others.
How much will it cost?
The amount of the premium rate depends on several factors, such as the country of investment, the character of the investment, the length of the investment, the method of securing the investment, participation of the investor and the like. The premium rate is assessed for each project individually.
How is the insurance paid for?
The insured pays the premium in one payment in advance. By payment of the premium the insurance policy acquires force.