Coverage in the Danish trade credit insurance market restabilised
Government-backed DKK 30 billion guarantee fund now Commission-approved and ready for uptake by the four trade credit insurers serving the Danish market. The new scheme, administered by EKF Denmark's export credit agency, will be crucial in restoring business-as-usual to Danish B2B trade.
How the scheme works
Under normal circumstances, trade worth around DKK 450 billion is credit-insured in Denmark annually. The sovereign guarantee worth DKK 30 billion ensures that trade credit insurers in Denmark are in a position to maintain their customary insurance capacity during the coronavirus crisis and the rest of 2020. The scheme is open to firms offering short credit periods of up to 180 days.
How to access the scheme as a business
Danish businesses seeking TCI for their transactions should contact one of four following trade credit insurers:
Going forward, the trade credit insurance (TCI) providers already operating in the Danish market, Atradius, Coface, Euler Hermes and Tryg Garanti, will once again be able to greenlight insurance for Danish domestic and exporting firms.
TCI is a key element in facilitating sound, friction-free B2B trade, but became risky business as soon as the coronavirus crisis broke out.
Businesses worldwide are currently facing cash flow problems or insolvency, and many of them are hard put to pay their bills. This means that the corona crisis impairs the creditworthiness of otherwise healthy businesses on an unprecedented scale, and the higher risk of defaulting debtors means that new B2B trade may not be able to secure insurance.
If the TCI providers are to continue to cover Danish businesses' sales on credit for both domestic trade and exports, state relief is needed.
To that end, the Danish Government's DKK 30 billion sovereign guarantee scheme announced on 18 April 2020 has now been Commission approved and is ready for uptake.
In specific terms, this means that the Danish Government assumes a percentage of the TCI providers' risk of loss from covering B2B trade in 2020, in return for which, the private TCI operators have committed to maintaining their insurance capacity on the Danish market for the duration of the coronavirus crisis.
Agreement will make all the difference to Danish trade
The guarantee scheme was devised jointly by EKF and the TCI sector in order to arrive at the best solution all round.
“Atradius, Coface, Euler Hermes and Tryg Garanti are delighted that it was possible to set up a solution so fast in association with EKF. Trade credit insurance means stability and certainty, and with the new scheme we are now in a position to cover credit risk for the rest of 2020 with the same confidence as before the crisis. Enabling businesses to start channelling sales again is crucial for the economy, so this agreement will be a colossal boost to Danish trade over the short and long term”, came the joint statement from the four TCI companies.
EKF is also very pleased with the new solution and its partnership with the TCI providers on the Danish market:
“At a time of crisis like this, we are pleased to be able to help Danish firms that bit extra by ensuring that they continue to have access to credit insurance for their sales to Danish and international buyers. We look forward to building on the productive relations we already have with the four companies concerning insurance of exports so as to extend coverage to domestic B2B trade,” said Kirstine Damkjær, CEO of EKF.
Minister's call to B2B traders: Take out Insurance
Simon Kollerup, Denmark's Minister for Industry, Business and Financial Affairs, likewise welcomed the new scheme, which is part of the Danish Government's business relief measures.
“Conducting business during the coronavirus crisis has become riskier. This is why we set up the scheme to restore confidence in engaging in B2B trade. I would urge businesses to make the most of the scheme in securing trade credit insurance for their transactions. This applies both to businesses that habitually took out trade credit insurance, and who will now be in a position to do so on the same scale as before, but no less to B2B operators who are unaccustomed to insuring their domestic and export transactions,” was the call to action from Simon Kollerup, Minister for Industry, Business and Financial Affairs.
EKF / Søren Weber Stendal, Senior Communications Officer, M: +45 20 19 45 21, E: firstname.lastname@example.org
Atradius / Erik Skovgaard Nielsen, Country General Manager, M: +45 29 43 12 66, E: email@example.com
Coface / Helle Damsgaard, Nordic CEO, M: +45 53 83 14 17, E: firstname.lastname@example.org
Euler Hermes / Rikke Thomsen, Head of Market management & Digital, Nordics, M: +45 22 68 86 57, E: email@example.com
Tryg Garanti / Tanja Frederiksen, Head of Corporate Relations, M: +45 51 95 77 78, E: firstname.lastname@example.org
Danish Ministry of Industry, Business and Financial Affairs / Ulrik Scheibye, Press Officer, M: +45 91 33 70 17, E: email@example.com