The term ‘risk exposure’ includes EKN’s commitments in offers and guarantees, and the claims that EKN has taken over in conjunction with indemnifications. The claims also include the claims for interest that EKN can make to the various debtors.

The outstanding volumes of offers and guarantees at the end of 2007 are for similar amounts and a similar distribution by country, compared to the 2006 year-end. In total, the volume at the year-end was SEK 158 billion, compared to SEK 151 billion at the end of 2006. The volume of offers was SEK 69 billion, compared to SEK 60 billion the previous year. The volume of guarantees was SEK 89 billion, compared to SEK 92 billion at the previous year end.

Claims continued to decline during the year, by SEK 1.4 billion to the present figure of SEK 6.9 billion. The reduction is mostly because of the large recoveries primarily from Peru and Angola, and the debt-relief of the outstanding claims on Cameroon. A small part of the reduction was the result of currency trends, as the greater part of the claims are in US dollars. Another distinguishing feature of the year was that on the whole there were no additional items which usually increase the size of the claims, such as indemnifications paid out, or capitalised interest in contracts.

Exposure split by type of risk

The distribution of the total exposure by type of risk continues to be largely unchanged. The declining proportion in recent years of pure sovereign risks and other public sector sovereign risks switched during the year to a small increase, by 3 percentage units to 38%. Telecoms has declined by 5 percentage units to 14%. The demand for counter guarantees is reflected in an increase of 3 percentage units to 15%.

Reduced risk concentration

EKN has exposure and/or claims in a total of 125 countries, but the risks are very unevenly distributed between the countries. A handful of countries are responsible for the bulk of the risks, and as in the previous year, Pakistan and South Africa are at the top of the list. During the year just gone, the concentration of risk has declined slightly. This can be explained mainly by the new transactions that have taken place and which have reduced South Africa’s share of the total exposure, and in addition the risk periods for exposure in South Africa and Pakistan have become shorter.

The exposure in Sweden has increased the level during the year. This is because the risk in the counter guarantees which have been in demand lies with the Swedish exporters. Other countries in the table are, with some exceptions, the same countries as reported in the previous year.

When estimating our risk exposure, we take into account whether there is a concentration risk in the transactions, and we make provisions to cover this risk, which we call unforeseen losses.

Reinsurance

During the year, we took out reinsurance in the private sector market for a single risk relating to Iran, to the value of EUR 50 million. Furthermore, the contract period has been extended by one year, partly for comprehensive reinsurance for 20 risks in 20 countries, partly for a counterparty relating to the reinsurance of Pakistan. In total, the reinsurance on the private sector market amounted to SEK 3.9 billion at the year-end.
We had reinsurance policies with other export credit agencies to the value of SEK 1.6 billion, and other export credit agencies had reinsurance with us to the value of SEK 17.4 billion.

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