London, 21 April 2020 – A preliminary report released today outlines a significant cumulative response from insurers of export credit, resulting in four broad categories of support, based on:
- Supporting exporters – through increased flexibility and relaxation of terms for policyholders (exporters) or their clients; expedited processes (approvals / claims processing); some concessions, waivers or flexibility on fees and premium payments
- Maintaining industry capacity to support trade – through increasing capacity, easing restrictions and augmenting private market capacity through new direct cover, reinsurance or top-up by public insurers (ECAs)
- Reducing pressure on cashflow and supporting the supply chain – through increased support for finance indirectly related to exports: e.g. cover for working capital; pre-shipment finance; bonds; domestic suppliers to exporters; import guarantees
- Minimising defaults on existing loans – through directly, or in conjunction with the banking system, facilitating favourable restructuring: deferred payment schedules; extended repayment period; waivers of some interest and fees Read the full report via the Berne Union website at: https://www.berneunion.org/DataReports The Berne Union continues to track the industry response to COVID-19 and will periodically release updates to this report.
Export credit insurance is a vital instrument in support of international trade. It indemnifies exporters and financing banks against the risk of non-payment, due to commercial and political risks. As a through-the-cycle risk-mitigation tool, credit insurance is designed to support trade through both benign and challenging environments, by helping to manage risk and liquidity for exporters.
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