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Foreword
The ICISA INSIDER
Publication of the International Credit Insurance & Surety Association Volume 15 | April 2020
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Content
Foreword 1
Lockdown offers an opportunity for regulators to reconsider differing views on the position of credit insurance as a risk mitigant EBA opinion 4
Covid-19: Assessing the economic impact on China and the Asia-Pacific region Article by Rajiv Biswas 6
Synthetic Trade Finance: 7 Signs to spot a House of Cards Article by Baldev Bhinder 14
New Laws Affecting Recovery in Singapore: COVID (Temporary Measures) Act 2020. Article by Baldev Bhinder 18
ICISA press release on Covid-19 pandemic
Announcements
KahakhExport joins ICISA New member 19
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21
Dear Reader,
The Covid-19 pandemic has triggered a sudden and unprecedented economic shock, the overall impact of which is not yet known. The pandemic and essential containment efforts have resulted in significant business interruption across a wide range of businesses and sectors.
Members of ICISA are working hard to support policyholders in this difficult time and remain committed to playing their part in seeing this crisis through and spurring the eventual recovery.
To meet the demands of the crisis triggered by the Covid-19 pandemic members of ICISA across the European Union as well as in other jurisdictions, are advising their national governments on support schemes for credit insured risks.
Experience from the previous crisis shows that structuring such schemes as reinsurance arrangements, where the state provides an essential backstop to private cover, ensures minimal disruption to existing arrangements, while also avoiding any delays in providing short term credit cover to the businesses that need it now and especially when trade resumes.
In an effort to ensure continued availability of cover, the European Commission has made all short-term risks non-marketable, allowing
public players to enter this market segment to take on these risks. This is good news for new export risks. Additional players are welcome in this difficult market.
However, this decision fails to address two important elements: it does not address domestic trade, which represents the largest part of short-term risks. Secondly, traders want to know if existing cover can be maintained. Support measures are more effective if these focus on continuation of existing cover. It is hoped that newly agreed support schemes address this gap.
Cross-border business is a cornerstone of the internal market of the European Union and will be essential to its successful recovery from this crisis. Firms ranging from large multinationals to micro-enterprises trade in one or more member states other than their own. >>>
It is therefore hoped that approaches to support schemes within the European Union are closely coordinated and harmonised. A patchwork of different schemes is a costly administrative burden for traders and may lead to the possibility of arbitrage between schemes in a time when their attention is rightly focused on limiting the effects of the crisis on their company.
In a few countries outside of the EU credit insurers are also engaging with their resp. governments on setting up support schemes. A low penetration level of credit insurance in those markets may make discussions difficult, as governments may be less familiar with the key role played by credit insurance in facilitating trade. This crisis is an opportunity to help these governments understand that support schemes that recognise credit insurance as an essential trade instrument are part of the solution.
The ICISA Insider
How to get a free Subscription
If you would like to be added to the distribution list of The ICISA Insider, please send a message to secretariat@icisa.org. Governments will determine to what extent credit insurance is vital to trade and to their economy and subsequently, what priority is given to these support schemes.
Governments that recognize credit insurance as an efficient instrument for their economic support package are currently working with credit insurers to set up support schemes that include measures aimed at preserving buyers’ ability to pay when trading resumes.
The credit insurance industry is ready to join public efforts to combat the consequences of the Covid-19 crisis, by working together with governments to keep trade going.
Join over 3600 other industry experts in the ICISA group on LinkedIn.
Robert Nijhout, Executive Director
Editorial Information
For suggestions and announcements, please contact: Raluca Ezaru (editor) T +31 (0)20 - 625 4115 Raluca.Ezaru@icisa.org
A Guide to Trade Credit Insurance
A practical and accessable industry-wide reference on Trade Credit Insurance, written by a team of industry experts.
This compact volume is a practical guide for anyone interested in Trade Credit Insurance. The International Credit Insurance & Surety Association (ICISA) presents an approachable but detailed guide written collaboratively by carefully selected industry experts. The guide describes the ‘lifeline’ of the credit insurance product, from the initial application stage to the expiration phase of the policy, including practical use aspects for credit managers. The volume offers compact information on the history of trade, the need for protection against trade credit risks, and solutions offered by credit insurance providers. The focus is on short term credit, including whole turnover policies and single risk policies.
Readership
Suitable for anyone interested in Trade Credit Insurance, from credit managers to policymakers.
Contents
Foreword; Introduction; Disclaimer; 1. What is trade?; 2. What is trade credit insurance?; 3. Product types; 4. Risk types; 5. Typical set-up of a trade credit insurance contract; 6. Premium, the price for cover; 7. Day-to-day policy management; 8. Buyer risk underwriting in trade credit insurance; 9. Debt collection; 10. Imminent loss and indemnification; 11. Renewal, expiry, termination of a policy; 12. Single risk business; 13. The single risk insurance market: Private and public players; 14. Reinsurance of Trade Credit Insurance; Trade Credit Insurance resources; Glossary of trade credit terminology
Key selling points
• Collaboration of a diverse group of experts from top organizations around the world • Written in an approachable style, accessible to the non-specialist • Includes extended glossary of key terminology • Includes a list of relevant resources for further reading
About the Author(s) / Editor(s)
The International Credit Insurance & Surety Association (ICISA) brings together the world’s leading companies providing trade credit insurance and surety bonds. ICISA promotes technical excellence, industry innovation and product integrity, as well as addressing business challenges generated by new legislation.
Where to order my copy
To order a copy of the book ‘A Guide to Trade Credit Insurance’, please visit www.amazon.com.
