KredEx Krediidikindlustus paid indemnities for credit losses worth a quarter of a million euros

In the first half of 2019, KredEx Krediidikindlustus paid indemnities to eight companies in the total amount of approximately 250,000 euros. The largest losses were paid to companies whose business partners had faced unexpected payment difficulties or bankruptcy. The largest indemnities paid out went to companies operating on the Finnish and Belgian markets as well as on the domestic market. 

According to Erki Aamer, the CEO of KredEx Krediidikindlustus, Estonian companies are increasingly aware of how to hedge risks that may arise due to the insolvency of their cooperation partners and of the possibility to prevent potential economic losses by means of credit insurance. “Estonian companies have insured a total of 622 million euros worth of sales against payment difficulties by their cooperation partners operating in 57 countries,” Aamer said, summarising the results of the first half of the year.

According to Aamer, all too often cases of indemnification for losses are related to the business partners of the insured companies going into bankruptcy. “This was also true for the first half of this year – the largest losses, worth approximately 100,000 euros, were related to the bankruptcy of buyers and temporary payment difficulties experienced by business partners due to the main contractor’s failure to make payments on previously agreed dates,” continued Aamer. The largest indemnities paid by KredEx Krediidikindlustus in the first half of the year went to companies operating on the Finnish and Belgian markets as well as on the domestic market. 

Preventing unexpected losses and increasing competitiveness in international trade 
“Our experience shows that unexpected events can occur even in relation to long-term business partners both on domestic and foreign markets. However, credit insurance has helped companies prevent situations where the payment difficulties of a business partner would otherwise have a negative impact on the activities of their company,” said Aamer, explaining that KredEx Krediidikindlustus acquires from the client their claim for damages, recovers the losses from the debtors and pays indemnities.

In the first half of the year, KredEx Krediidikindlustus signed contracts with 16 new companies, the majority of which had not used a credit insurance service before. “Insurance contracts with buyers operating in the manufacturing sector (e.g. metal, wood and chemical industries) account for the largest growth in our portfolio,” explained Aamer. Forty per cent (40%) of the transactions and sales insured by the company in the first half of the year related to exports. The share of insured exports in the total portfolio of the insurance company has grown to 68%. 

KredEx Krediidikindlustus is the only insurance company in Estonia that offers exporters the opportunity to insure their companies against losses derived from unpaid invoices. Since its establishment, KredEx Krediidikindlustus has insured the sales of Estonian companies in 100 countries for more than 4 billion euros.

For further information on the credit insurance solutions offered by AS KredEx Krediidikindlustus, please visit www.ekspordikindlustus.ee