Berne Union Upbeat on Global Trade, Credit Insurance

July 12, 2010

The Berne Union* closed its recent biannual meeting in Helsinki Finland on a tone of cautious optimism for global trade and investment. The Union’s bulletin pointed to “a resurgence in credit insurance capacity and a leveling off from the surge in claims experienced in 2009,” as the basis for the upbeat outlook.

“In 2009, our members provided $1.4 trillion of credit and investment insurance support, which was a remarkable achievement, given the sharp fall in global trade volumes, but at the same time we experienced a significant jump in claims to $5.4 billion. Now it appears that claims are leveling off and we anticipate that business volumes will increase in 2010,” explained Kimberly Wiehl, the Union’s Secretary General.

Discussions at the meeting included a focus on the global economy, with particular emphasis on Europe and specific countries in other regions.

“Berne Union members are acutely aware of the volatile risk environment given our claims experience, but the focus of our discussions has been on addressing ways to maintain market capacity to support our clients, rather than stepping back given the uncertainty,” indicated Angus Armour, the President of the Berne Union and CEO of EFIC, Australia’s export credit agency.

“As credit and investment insurers, we can contemplate stepping up capacity on the basis that the industry globally was able to absorb the increased claims of the past year, which is a testament to our members’ risk management models”, he added.

Apart from the volatile risk environment, Berne Union members are watching carefully the regulatory changes that might flow from the global financial crisis.

Wiehl noted that an “emerging concern for our members is the changing regulatory landscape. Proposed changes to capital requirements relating to trade and export finance could have significant implications for our members’ ability to support trade and consequently, for trade volumes and the global economy.”

*Founded in 1934, the Berne Union (International Union of Credit & Investment Insurers) is the leading international association for the export credit and investment insurance industry. It works for cooperation and stability in cross-border trade by supporting the international acceptance of sound principles in export credits and foreign investments and by providing a forum for professional exchange among its members.

Source: Berne Union

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