Institutions Providing Export Credit Insurance

Export credit insurance, guarantees and/or funding support are usually provided by specialised institutions, the Export Credit Agencies (ECAs), which can be governmental, semi-governamental or private agencies, established with the aim of facilitating exports and enhancing trade through the provision of their services.

Originally these services were provided by state-owned institutions but in the last ten years, risks insurance has been taken into consideration by private sector insurance companies, which usually guarantee short-term commercial risks.

Export credit agencies and insurance companies nowadays assume different forms: a section of a ministry, a government agency, a semi-public joint stock company or a private institution sometimes operating on behalf of the government. The actual distribution of the insurance and financing activities among institutions depends on the country’s laws and regulations. In some cases, official financial support is provided only when backed by an appropriate insurance; in other cases, the entry of private banks and insurance companies into the market is forbidden.

The growth of the private sector is connected to the gaps it fills in the programs of the official credit agencies, for example by insuring pre-shipment risks, pre-export financing, countertrade deals and existing investments. Its development benefits exporters, in terms of improved insurance programs, policies and conditions of coverage, as well as insurers, thanks to expanded activity.

Some state-owned ECAs have been privatised during the last years: the Export Credits Guarantee Department (ECGD), former British Government department, or the Compagnie Française d’Assurance pour le Commerce Extérieur (COFACE), which has also expanded itsoperations in many countries by creating Credit Alliance, an international network of specialised credit insurers.

In certain cases, namely when exports from different enterprises of different countries are to be financed, public and private agencies become partners: as for example in the case of COFACE and ECGD signed in 1995 an agreement that enables Anglo-French bids on major overseas projects. Private agencies also try to co-ordinate their policies on major issues and to exchange information on borrowers. This cooperation has induced the development of institutional arrangements, operating mainly through OECD, the Berne Union and ICIA.