moscow, 8th december 2008
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Export Credit Agencies – Reliable Partners in economically challenging times Круглый стол «Страхование экспортных кредитов в Россиии и за рубежом: перспективы и проблемы развития» Dr. Hans Janus, Member of the Board of Management of Euler Hermes Kreditversicherungs-AG. - PowerPoint PPT PresentationTRANSCRIPT
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Export Credit Agencies – Reliable Partners in economically challenging times
Круглый стол «Страхование
экспортных кредитов в Россиии и за рубежом: перспективы и проблемы развития»
Dr. Hans Janus, Member of the Board of Management of Euler Hermes Kreditversicherungs-AG
Moscow, 8th December 2008
General reasons for Governments to offer state export credit insurance
►supporting national export industry on global markets
►offering coverfacilities in areas where the private market is not (sufficiently) present
►being complementary to the private market and playing a countercyclical role
►creating a global level playing field for state supported export activities
►making long term financing available for capital goods exports
►transfer of risks from the exporters’ balance sheet to the balance sheet of the financing bank and ultimately to the state budget
„Classic role“ of Export Credit Agencies (ECA) during financial crises
► act countercyclically to the general economic development
► make insurance capacity available to make export business happen
► stabilize global trade flows
► co-ordinate and combine efforts with other ECAs in order to multiply effects of concerted actions
► however: sound underwriting principles must not be abandoned
Major challenges for maintaining or further increasing ECA business during economic crises
► rapidly deteriorating economic and financial situation of foreign buyers
► unpredictable changes of commodity prices, exchange rates, global demand etc.
► weakening or unavailability of security for credit (bank or parent company guarantees, pledges of assets etc.)
► investment decisions being postponed or cancelled
Direct impacts of the current economic environment on ECA activities
increasing commercial risk due to economic downturn in many countries
increasing political risk as financial situation of many countries deteriorates
drying-up of liquidity: unavailability of medium and long- term financing in the banking market
strongly increasing demand for Export Credit Guarantees
Appropriate reactions of ECAs under these circumstances
keep the relevant insurance programs open
intensify marketing efforts and advise for exporters, in particular for SME
continue underwriting applying increased level of caution
credit analysis on the basis of the latest financial information
maintaining price for cover on a reasonable level
Preliminary conclusions
► we are in the middle of an extremely difficult situation
► we are needed more than ever
Most recent development of Euler Hermes ECA business in 2008
Increase of business: 25% up compared to 2007
17 bn EUR of German exports covered until 10/2008
Russia top priority market (No. 1 in 2007 and 2008)
claims (still) on a comparatively low level
EH elected „Best Export Credit Agency“ for the 4th time
Federal Minister of Economics and Technology Michael Glos: „The ceiling in the federal budget for Hermes Cover is by far not exhausted yet. The Federal Government is in the position to provide significantly higher cover than in previous years, in particular in order to support exports to the emerging markets“ (25th November 2008)
Euler Hermes ECA business in Russia 2008
Russia again market No. 1 in 2008
Total exposure exceeding 7.5 bn. EUR
More than 2.0 bn EUR new export credit cover (10/2008)
Offers for cover 2.1 bn EUR (10/2008)
thereof 1.10 bn EUR (57%) based on corporate risk
thereof 0.90 bn EUR (43%) based on commercial bank risk (more than 40 banks)
► ST 900 mln EUR, MLT 1.100 mln EUR
► More than 5 bn EUR cover for German direct investment in Russia
The German Government and its agents Euler Hermes and PricewaterhouseCoopers as ECA Consortium are determined to remain Russia’s leading partners in ECA supported trade, export and investment business.
Thank you very much for your attention!
Большое спасибо за Ваше внимание !
Thank you for your attention!
Dr. Hans Janus,Manfred Bruer
Further information is provided under:
Hotline: +49 (0) 40/88 34-90 00