EKN’s exposure

The volume of outstanding offers and guarantees was considerably larger than at the end of the previous year. This was due to more large transactions and a large number of applications in the latter part of the year. The proportion of sovereign risks and other public risks continues to fall as the new transactions mainly involve risk-taking on private buyers.

The total volume of outstanding offers and guarantees amounted to SEK 183 billion at the end of the year, compared with SEK 158 billion in the previous year and SEK 151 billion in 2006. Offers increased to SEK 78 billion from SEK 69 billion at the end of the previous year. The guarantee volume rose to SEK 105 billion compared with SEK 89 billion at the end of the previous year.

The increase is due to high demand for EKN’s guarantees in the latter part of 2008. A considerable number of large transactions and applications resulted in a rapid rise in the volume of outstanding offers and guarantees in the third quarter.

As in the previous year, EKN had offers and guarantees in 125 countries at the end of the year. The 15 countries accounting for the largest proportion were largely the same as last year.

Transactions in Iran and Russia represented a larger proportion than at the end of the previous year. Bangladesh, Namibia and Serbia are countries which now find themselves in the list of the top 15.

Distribution by risk and sector

Distribution by risk type changes when older transactions involving state buyers are concluded and new transactions mainly involving private buyers are included in EKN’s portfolio. The proportion of private buyers is increasing, while state and other public buyers are falling. This has been a notable trend over a number of years and can also be seen in a comparison between 2008 and 2007.

Claims on a par with previous year

At the end of the year, claims amounted to SEK 6.9 billion, which is on a par with the previous year. The largest claims are in North Korea, the Democratic Republic of Congo and Pakistan.

We received SEK 270 million plus interest from the Swedish government in payment for claims in Cameroon which Sweden had decided to write off.

Reduced risk concentration

Risk exposure is unevenly distributed among the countries. A small number of countries account for a very large proportion of our exposure and, as in the previous year, Pakistan and South Africa come out on top. In 2008, the concentration of risks fell slightly as a result of several new large, long-term commitments in the portfolio.

When estimating risk exposure, EKN considers whether there is any concentration risk in transactions and makes provision accordingly. This provision covers the risk of unexpected losses, in contrast to the expected risk for each individual transaction.

Reinsurance

During the year, EKN took out reinsurance in the private market for a single risk relating to Angola totalling USD 12 million. In addition, the contract period for a portfolio insurance of 20 commitments in 20 countries was extended by one year. In total, reinsurance on the private market amounted to SEK 4.5 billion at the end of 2008.

EKN also had reinsurance with other export credit agencies totalling SEK 1.5 billion, while other export credit agencies had reinsurance with EKN totalling SEK 17.6 billion at the end of the year.