The British Insurance Brokers’ Association (BIBA) has formed an agreement with the Government’s Export Credits Guarantee Department (ECGD) to provide general insurance brokers with access to the ECGD export insurance scheme for their clients.
The agreement between BIBA and ECGD will mean that brokers can access the scheme to insure UK exporters against non-payment by their overseas buyers. Access to this government backed insurance scheme has, until now, only been available direct from the Government to businesses.
In addition to the agreement, a sub group of the BIBA Trade Credit Risk Focus Group engaged with senior executives of ECGD to re-work the current Export Insurance Policy (ExIP) wording so that it provides adequate support for exporters and also can be used to obtain trade finance.
Peter Staddon, Head of Technical Services, said: “In the last 18 months, our members have seen the availability of credit insurance reduce. BIBA engaged with ECGD to plug this gap to help UK businesses on an international stage and encourage business overseas.
“We believe that BIBA’s specialist members have an important role in raising awareness of ECGD’s new wider product coverage announced in February. Access to ECGD to the wider BIBA membership will be invaluable to businesses in distributing and placing the export risk.”
BIBA has encouraged ECGD to use the broker distribution channel to publicise the existence of trade credit insurance. Brokers are able to provide support for placement of cover that suit the demands and needs of exporters and potential exporters.
Patrick Crawford, CEO of ECGD, commented: “We are pleased to be able to work with BIBA and their specialist members to encourage businesses across the UK to look at overseas countries as marketing opportunities.”
Specialist credit insurance broker Perkins Slade will be wholesaling the scheme to the wider BIBA membership.
Sally Del Principe, Associate Director at Perkins Slade, added: “On behalf of the Trade Risk Focus Group, Perkins Slade is delighted with the agreement, and for convincing ECGD to use the broking channel to distribute the product. This will open doors for SME exporting businesses to trade with confidence in non-OECD territories.”
Credit insurance complements existing insurance to cover transit of goods from UK businesses to buyers so that if there is a failure to pay for the goods, the credit cover compensates the exporter for their loss of sales income.
The Government’s white paper Trade and Investment for Growth published on 9 February announced that ECGD would be able to offer short term export credit insurance for all types of goods (for non-marketable risks). This will provide a one-off cover with a minimum contract value of £20,000.
The Government wants to encourage exporters to sell more products and services to developing markets with high growth rates are higher than OECD and to encourage more SMEs to export.
Source : BIBA Press Release
