Credit insurance: Reinsurance programme by the State to support the Belgian economy


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A memorandum of understanding has been signed between the Belgian State, Credendo, Assuralia and the private credit insurers 
  • A memorandum of understanding has been signed between the Belgian State, Credendo, Assuralia and the private credit insurers 
  • This agreement is intended to support the Belgian economy by maintaining the credit limits granted by private credit insurers to companies located in Belgium
  • It provides the setting up of a reinsurance programme enabling private credit insurers to continue to play their part in spite of the covid-19 crisis
  • Credendo, acting on behalf of the State, will act as reinsurer

In the context of the covid-19 outbreak and in order to counter its harmful impact on the economy and trade, a memorandum of understanding concerning a reinsurance programme for private credit insurers providing short-term commercial credit insurances (less than 2 years) by the Belgian State was signed on 21 April 2020 by the Minister of Finance, the Minister for Economy, the Minister for Security and the Interior, in charge of Foreign Trade, Credendo – Export Credit Agency, Assuralia and credit insurers Atradius, Coface, Credendo – Short-Term Non-EU Risks, Credendo – Excess & Surety and Euler Hermes. The negotiations took place under the aegis of the National Bank of Belgium.  

The credit insurance sector is vital for companies and trade in Belgium and Europe. Commercial companies generally grant payment terms of 30 to 90 or even 180 days to their (business) customers. The role of credit insurers is to secure business-to-business commercial transactions and to indemnify their policyholders in the event of non-payment of invoices by their customers. For this purpose, credit insurers grant credit limits that they agree to cover for a specific customer of their insured. Together, the credit insurers that signed the memorandum have credit limits covering a total of more than EUR 57 billion worth of invoices for the benefit of their insured located in Belgium. This shows the essential role of credit insurance in the economic development and business life in Belgium.

Due to the consequences of the covid-19 pandemic, the risk of non-payment by customers has become such a concern that credit insurers should, in accordance with normal procedures, reduce the credit limits granted to the customers (debtors) of their insured. This results in a risk of a lack of credit insurance for trade receivables in the private market. The reinsurance programme by the State is intended to mitigate this risk for insured companies located in Belgium for their commercial transactions with buyers (debtors) based both in Belgium and abroad.

Under this agreement, the credit insurers undertake to keep the credit limits actually used in the 12 months preceding 1 March 2020 as intact as possible until the end of the year 2020. In this way, trade relations and flows can be maintained.

In return for this commitment, Credendo – Export Credit Agency, acting on behalf of the State, undertakes to reinsure the risks underwritten by the aforementioned credit insurers established in Belgium. The reinsurance programme provides that a substantial portion of compensation will continue to be borne by the insurers, with this portion evolving according to the loss ratio. Furthermore, the programme provides for a progressive sharing of premiums between the insurer and Credendo, also depending on the loss ratio.

A reporting system will be set up to monitor credit insurers’ commitment. It will consist of monthly reporting on the evolution of existing credit limits. It goes without saying that the confidentiality of commercial data is guaranteed. If requested by the State, the credit insurer will be required to briefly explain the basis on which it took a decision, in order to demonstrate that it does not act arbitrarily.  

The conclusion of this agreement and its implementation address the concerns of the corporate world. Accordingly, Credendo – Export Credit Agency, acting on behalf of the State, and each private credit insurer having signed the memorandum have undertaken to conclude a bilateral reinsurance treaty as soon as possible. 

Press contact

Nabil Jijakli
Group Deputy CEO 
rue Montoyer 3
1000 Brussels
M +32 478 25 11 33

Philippe Colle
Managing Director
T 02/547.56.41


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