OTTAWA – May 13, 2003 — Canadian exporters will find it easier to obtain surety bonds they need to win contracts in the U.S. as a result of a new reinsurance agreement reached between Export Development Canada (EDC) and St. Paul Guarantee Insurance Company.
The two companies have entered into a Surety Quota Share Reinsurance agreement. Under the terms of the agreement, EDC will provide up to US$200 million in additional reinsurance capacity to St. Paul Guarantee Insurance Company to cover surety bonds issued on behalf of their Canadian exporter clients undertaking U.S. contracts.
While the agreement is expected to bring immediate assistance to about 50 companies currently using St. Paul Guarantee services to meet their U.S. contract surety bond requirements this year, the two companies expect many other companies to take advantage of this increased insurance capacity.
“This is the first Surety Quota Share Reinsurance Treaty EDC has signed. It is an innovative addition to the scope of surety assistance EDC provides to Canadian exporters. It is also an excellent example of leveraging public-and private-sector strengths to provide a valued service to Canadian companies.,” says Kevin O’Brien, EDC vice-president, Contract Insurance & Bonding.
EDC and St. Paul Guarantee Insurance Company have partnered for nearly 10 years to assist Canadian exporters through EDC’s surety reinsurance facilities. EDC and St. Paul Guarantee are also engaged in a strategic alliance to provide both domestic and export accounts receivables insurance for Canadian companies to protect them against the risks of both domestic and export sales.
“The relationship that we established with EDC has provided tremendous value to St. Paul Guarantee over the years. The additional capacity included in this agreement will allow us to better serve the needs of our customers as we continue to grow our business.” says George Petropoulos, President & CEO, St. Paul Guarantee Insurance Company.
A subsidiary of The St. Paul Companies, Inc., St. Paul Guarantee Insurance Company (formerly London Guarantee Insurance Company) is the largest provider of surety bonds and a leading specialty insurer in Canada. The St. Paul was founded in 1853, and ranks 207 on the Fortune 500 list of the largest companies in the United States.
EDC provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets. Founded in 1944, EDC is a Crown corporation that operates as a commercial financial institution.