Risk Management Services
  • Guarantees
  • Credit and Political Risk Insurance
  • Credit Guarantees to FI’s and Bank Risk confirmation
Contract Guarantees

Surety:

Our surety solutions allow our client, to benefit from our large pool of Insurance partners from across the globe. Additionally, with our extensive experience and expertise, we assist you by structuring bespoke solutions, giving certainty for your capital management requirements.

Types of Guarantees

  • Bid / Tender
  • Performance
  • Advance Payment
  • Warranty
  • Maintenance
  • Retention
Payment Guarantees

Our Payment Guarantee provides the beneficiary, with financial security, should there be a failure to make payment for the goods or services supplied. It offers a type of collateral in exchange for the promise of payment at a future time, effectively minimizing the risk for the company conducting the sale. Our Payment Guarantees mitigate credit risk and are often used to cover the non-payment of debts arising under a transaction or over a period of time.

Mining Guarantees

Our Mining Guarantees comprise of a basket of products, so that you as our client can choose what best suits your needs.

  • Pre-Production Guarantee, Advance Guarantee on the back of Off-take Agreement
    We can support you at exploration stage wherein the guarantee can be utilised for initial commencement of operations. However, this will be post obtaining of all mining and regulatory licenses.
  • Advance Guarantee on the back of EPC Contract
    Our Advance Guarantee is offered when there is an EPC contract between the Mine Owner and the EPC contractor, for the works defined in the contract related to the mine operations.
  • Sponsored Advance Product
    This product is useful when the EPC contract does not provide for an advance payment guarantee clause. Repayment of such monies shall be basis the project cash flow and be paid in full until the project achieves a certain percentage of work.
  • Payment Guarantee
    Payment Guarantee is a good option when there is a contract between the Mine Owner and the trader with a definitive off-take agreement in place for procurement or working capital facility.
  • Mining Rehabilitation Guarantee
    • All mining operations must make financial provision, to guarantee the availability of sufficient funds, for rehabilitation and remediation of the adverse environmental impacts of mining activities – both during the life of the mine and at closure.
    • Through Mining Rehabilitation Guarantee we enable our clients to provide full value guarantee which is accepted by the Department of Mineral Resources. Ideally, this solution allows the matching of the environmental rehabilitation liability, with the company’s assets over a period of time.
    • Through Mining Rehabilitation Guarantee we enable our clients to provide full value guarantee which is accepted by the Department of Mineral Resources. Ideally, this solution allows the matching of the environmental rehabilitation liability, with the company’s assets over a period of time.
  • Benefits
    • Guarantee with full capacity provided immediately at inception.
    • Complies with all requirements of the Department of Mineral Resources.
    • Builds insurance reserves for future rehabilitation.
    • Saves immediate outflow for the mine owner, enabling utilisation of funds for mine operations instead of keeping them aside for future rehabilitation.
Credit and Political Risk Insurance

This service covers Banks and other Financial Institutions in the unfortunate situations when borrowers fail to pay back loans. The insurance acts as a stop-loss arrangement, thereby enabling lenders to leverage the banks’ credit limit on the obligor/country/loan type and assists the bank in obtaining capital relief.

Trade
  • Trade Credit - Short & Medium Term
  • Single Debtor, Multi Debtor, Whole Turnover & Bespoke Credit Insurance.
Non-Trade
  • Political Risk
  • Contract Frustration
  • Sovereign Non-payment Risk
Credit Insurance: Trade and Non-Trade

This basket of offerings is for Exporters, Contractors and Financial Institutions that conduct business with foreign Governments and are exposed to the risk of non-payment for goods delivered, services rendered, or funds borrowed.

Trade

  • Whole Turnover Insurance
    This insurance covers all or a substantial part of the sales. Whole Turnover Insurance typically covers only short-term trade credit. As our policyholder, you can choose to insure all the Accounts Receivables worldwide, or all your receivables in a particular region or with a particular customer.
  • Multi Debtor Insurance
    This product gives you a comprehensive, non-payment coverage on a portfolio of domestic and/or international sales.
  • Single Debtor Insurance
    This insurance can be taken depending on the size and value of your largest customers, to offset the risk of trading with an individual customer.

Non-Trade

  • Political Risk Insurance

    This insurance provides protection against risk from political events that negatively impact investments. The risks are usually higher in developing countries, where the economy and/or political environment maybe unstable. Political Risk Insurance is designed for all leading multinational companies, including Financial Institutions, Exporters, Investors, and Multilaterals.
    The covers are based on medium to long term projects with multiple perils covered. This insurance assists your business in anticipating risks and helps prevent, anticipate, respond and ultimately recover from crisis and broader political risk exposure and events.

  • Contract Frustration Insurance
    Here we cover losses occurring due to breach of contractual terms, resulting from an inability to pay as agreed. The breach could be by a private party or a public obligor. This insurance also protects the policy holder against a ban or restriction on exports due to cancellation of operating license at the behest of the host country.
  • Sovereign Nonpayment Risk
    Sovereign non-payment refers to the failure of a sovereign entity to honour its payment obligations under a guaranteed agreement issued in support of a project. Sovereign Non-payment Risk Cover thus protects you from defaults by Government owned entities or Ministries.
Credit Guarantees to FI’s and Bank Risk Confirmation

Under this coverage, we offer solutions for Non-Payment Risk of Banks/FI's (as obligors).

Bank Risk Confirmation Insurance protects the Confirming/Discounting Banks against non-payment of obligations by issuing banks. Up to 90% of the risk can be covered and these policies can be scripted for single or multiple transactions from the same bank and/or the same country.

Here’s How It Helps

Prowess advises Lenders/FI’s on Risk Mitigation Measures in identifying ways of reducing risk weighted assets. These solutions or products enable Banks/FIs to take capital relief under the prevalent BASEL norms. The policy wordings are Basel III compliant and hence offer an immediate capital relief on the required capital adequacy clause.

Risks Covered

Risks covered include business failure of issuing bank, protracted default by issuing bank, political risks in the issuing country such as expropriation, confiscation, war, riots and prohibiting conversion of currency.

Offerings

  • Portfolio Insurance
    As a Lender, you can send in details of the portfolio you would like secured e.g. geography wise, set of banks, or the entire portfolio. The insurer offers quotes which include pre-approved limits covering first loss on the portfolio.
  • Premiums can be fixed or flexible with a minimum commitment fee and a ‘pay-as-you-go’ option as well.
  • The policy wordings are Basel III compliant and hence offer an immediate capital relief on the required capital adequacy clause.