COVID-19 DISSCUSSION« Back to Previous Page

ICBA – UAE

For us in the GCC, besides the economic issues developed from Covid-19, the Oil prices have also dropped drastically and the effects are felt regionally as well as globally. The insurers have sent us their several latest reports and outlooks published on a weekly and monthly basis (also available on their websites).

The sectors that are currently considered by EH and Coface in the region for new business are: Pharmaceuticals, Paper, Agrifood, Chemicals, Retail, Energy, Automotive supplies. This being said, they are still extremely selective on the type of prospect we send as they are not willing to take on more exposure.

We find that the insurers are focusing and supporting more on the renewals, they have also extended reporting timelines during this period. Extension of due date or payment terms is a frequent request from our PH’s.

All the insurers contacted us to reduce limits;

Atradius: List of limit for review has been shared with PHs to bring the exposure to utilization. However we are informed that another review may follow shortly.

Coface: Coface actioned reduction in limits first (almost 50%) and then accepted appeals, however most appeals were not taken into consideration. They reduced limits on the effected sectors like Hotels, Restaurants, Aviation, Transportation, Construction, Oil related, Travel agents and Retail Non food sectors.

Euler Hermes: Similar to Coface and the actions faced by most ICBA members. Reviewed the above mentioned sectors, 2 weeks grace period was given for clients to appeal, unfortunately they did not take most appeals into consideration

All grade 7 limits and below were withdrawn, grade 5 & 6 were reduced between 40 – 70%.

QBE: contacted us to inform us that limits would be reviewed, reduced limits in the effected sectors by 100% (airlines, education, automotive etc.) and 25% review for the remaining. There were a few appeals accepted by QBE, but we have found a significant drop in the overall exposure.

The market is effected here due to COVID-19 and the oil prices drop for which we expect a drop in the economy.

INSCOM-ICBA – Czechia & Slovakia

Dear all, let me summarise actual status (7.4.2020) below:

1) Extension of the maximum extension period

2) Extension of the maximum payment terms

3) Extension of the notification and filing of overdue accounts

4) Flexibility on premium and fees payments

5) Extension of original due dates

6) Top up restrictions

7) Extension of sales declaration

8) Extension of claims filing

9) Other

Atradius local

3) plus 30 days (24-3-2020); in Czechia (not in Slovakia) our clients use Automatic stoppage of cover with reverse re-instalment of the cover if paid within this period; valid till 31.8.2020

Global: (Note: Different module of Automatic stoppage of cover, with no reverse re-instalment of the cover)

9) New T-code: T317 – COVID19 restrictions

– applies for all CEE countries: No new offers for clients from: automotive, transport, logistics, retail (with an exception of food, drugstores and pharmacy), HORECA (hotels, restaurants, Coffees, generally services, project works

– 6.4.2020 revision of the limits started with information to clients; we officially informed on 7.4.2020; individually send to customers (90% in copy to broker) with request to answer: “limit needed (Y/N)”, “leave limit amount at least”, “actually non paid receivables”;

Coface local / global

3) Extended by 60 days + (for receivables, where Notification was not needed on 25.3.2020 yet)

6) TopLiner still working on 5.4.2020 at 19:55; NO announcement about the cancellation of this possibility , on 6.4.2020 TopLiner cancelled

9) limit reduction in progress, no explaining info to clients and to broker

Credendo

3) Individually on request 30 days+ (responsibility of AM); more (responsibility of Sales Manager)

6) Credi+ suspended (26/3/2020)

9) revision / cancellation of limits on Italy, Spain, Great Britain (planned); afterwards where really important for clients, re-instalment of the limit

– requests for 12/2019 financials, Trade experience 12 months back, open balances, ….

– COVID19 is not insurance exclusion (e-mail information with no possibility to publish for example on our web)

– no ability to automatically prolong the policy, because of the new list of countries

– New list of countries: A,B,C countries; B:Great Britain, …. C: Italy, Greece, Spain, Turkey,

– all renewals has to be decided by the Board; overloaded, they do not manage promised

– deadlines, we have to push repeatedly; increase of the Minimum Premium, malus min. 20%

– New business: small policy and risky sector – NO offer

Euler Hermes local:

3) (only for receivables up to EUR 500ths. and for due date until 31.5.2020; NOT for financial institutions and NOT for World Agency; for Protracted default, NOT for Bankruptcy): Notification 30days +, but no cover Extended!

4) (only for SME with Turnover up to EUR 25mio.; until 30.4.2020): conditional on business disruption and written request

6) CAP 0,25% p.m., CAP+ 0,75% p.m., both since 1.7.2020 by current policies, immediately by new policies

7) maximum 30 days (in total) after policy period

9) officially announced review of the buyers generally with high risk + influenced with Corona risk

– clients should contact Account Manager of the Insurer, no Broker mentioned,

– new offers: 30 days validity only; CAP/CAP+ increase; Max. Extension max. 60 days;

– offers prepared in last months – they kept conditions and we closed 3 such unfinished policies

– Claims handled in Rumania; rules set on Corporate Advantage; but handling this way also Legacy Policies

Hi Ilan,

I will echo what Razvan stated, insurers are promising that will be no mass reductions/withdrawals. BUT! they will definitely cut limits for primary affected industries, for buyers that has low ratings already. They will be more strict and conservative in underwriting. Atradius should make a decision to turn off automatic credit limits for some industries, plus Atradius, Credendo (maybe others) are asking clients to provide data about their current outstanding, so insurer can align their exposure to actual level of the risk.

Hi Ilan, hi all,

In Romania the insurers are getting ready to cut limits, but no real action done so far from any of them. Coface and Atradius are denying of such actions, EH confirms transparent and prepares the plan. Coface is sending notifications to specific clients, based on industry, proposals to modify the MEP and rescheduling. The additional days are based on the industry and it is not a standardized approach as Atradius and EH.

Other than that I hope you are all OK!

Best regards,

Razvan

Hello partners ,

A massive portfolio cover reduction has been send to our Coface policy holders ( in ave. of 50% ) , not related to specific sector activity .

Will be interesting to know if are u facing same behavior at your territory .

Thx and just good health

Ilan – ICBA Israel

Hello Everyone,

I want to update you about Coface’s letter. The maximum extension period is now 60 days for all of the customers.

Hello Everyone,

Another quick update from the U.S. See below that QBE sent to all policyholders today.

To assist our customers in the management of their cash flow, which is a key priority at this time, we are temporarily permitting the following under our policies:

· Policyholders will have an additional 60 days added to the applicable maximum extension period set forth in the policy for their buyers (“Extended MEP”).

· For insured debt that is $500,000 or less in the aggregate, our policyholders may agree to a repayment plan without QBE’S prior approval for a period no longer than 6 months from the original invoiced due date. For the avoidance of doubt, QBE’s prior approval is required for any Insured Debt exceeding $500,000 in the aggregate and/or exceeding a 6-month repayment period.

· Our policyholders will not be required to report any overdues less than $50,000 in the aggregate.

· For all other terms and conditions, please refer to the relevant policy.

These accommodations are effective immediately and will remain in place until December 31, 2020.

Take care

Hi Everyone,

We asked to Euler Hermes about how they consider Covid-19. They have sent an email. They are not seeing covid-19 as force majeure for now.

@Anne: I agree. EH is not considering COVID19 as natural disaster or force majeure, but they will consider specific terms and conditions of the policy….

I have just spoken to an ACMA in Euler Hermes Denmark and she informs me that when Euler Hermes these weeks is reducing limits / cancelling limits, delayed effect / grace period will not apply.

Any comments??

ICBA-TURKEY

Hi Everyone,

I hope you all safe and sound. Atradius has sent a similar email to all clients so i am not writing again. There is no big actons yet. no limit reduction etc. I will keep you updated.

Hi guys,

Just was attending EH webinar where Lady Marie Florestan in the end of it has announced that EH is not considering COVID19 as natural disuster or force majore, but they will consider specific terms and conditions of the policy etc etc.

Stay healthy,

Anna

Uk – Atradius:

• the insured’s obligation to notify us of an overdue amount and/or the obligation to transfer to Collections 30 days after the expiry of the maximum extension period (MEP) is extended to 60 days after the expiry of the MEP.

• the insured may, without prior approval, agree a later payment date for a receivable (even after the expiry of the MEP) provided that the amended payment terms remain within 60 days after the expiry of the MEP.

These amendments become effective immediately and until further notice will remain in place for receivables where the expiry of the maximum extension period is reached before 01 September 2020.

Dear All,

Latest update from the US.

We are also asking Euler US for guidance on the EH Corporate Advantage policy. Thus far, we have not received meaningful feedback from their management. Euler Risk Actions are planned as follows:

Risk Grade 8: Cancel all sectors Grade 8 CAP+ EXCLUDED from action

Risk Grade 7: cancellation specific to the following sectors

§ Agrifood

§ Metals (Blast Furnace / Steel Service Center)

§ Tires

§ Textiles

§ Retail (except online & groceries)

§ Service (Hospitality, Restaurant, Entertainment)

§ Transportation

§ Automotive Suppliers

§ Oil & Gas (Upstream & Oil Field services)

Atradius sent a similar letter to all of our clients extending notifications, etc. QBE has formally stopped accepting any new applications. Several insurers have continued to withdraw outstanding applications. Renewals are challenging.

We will keep monitoring and updating and truly appreciate the feedback and collaboration from everyone!

Best Regards

Dear all,

every topic listed here (extension of maximum credit terms and notification deadlines, risk action plans, etc) are all important.

However, from my perspective the most critical topic is insurers stance on claim payments.

Just as an example: EH Corporate Advantage policy stats that ”…receivable resulting from goods or services Supplied is not insured if non-payment of the receivable results directly or indirectly from… any legislation, order, decree or regulation issued by any government or any international organisation recognised under international law (including if you are prevented from Supplying goods or services)…”

Other policies from Atradius and Coface include similar exclusions.

If a country shuts almost all shops and many of them will be insolvent, what will be then the position of the underwriters?

INSCOM-ICBA – Czechia and Slovakia

Hi to ICBA all,

I did not do any detailed research, but for Czechia and Slovakia:

– insurers did not do any „big action“ yet

– no huge limit reduction actions till now (seeing about 120 clients)

– new limits on some destinations (Italy) are not decided

– reductions of big exposures are expected

– Credendo cancelled possibility of their RISK LIMITS (CREDI+)

– INSCOM-ICBA is working without any interruption, and from Home Office since 11.3.2020

– prospects for which we prepared tender in last months and decided not to use the product (TCI), called (or we call them) and few changed their mind a will insure themselves

– yesterday we were the first broker in Czechia who signed the contract with EULER HERMES in new form (digitally signed by Euler, printed, signed and scanned back to us and to the insurer, without necessity to send it via classic post office)

All the best to you all!

Tomas Jandera, INSCOM-ICBA

ATRADIUS SWEDEN LETTER TO CLIENTS:

Dear Insured,

We are committed to partnering with you to get through these difficult and challenging days where the Covid-19 Corona virus is affecting national and international trade.

In order to give you and your clients more flexibility to arrange payments and to deal with eventual delays we amend your policy with immediate effect in two ways:

1) Firstly, we are postponing your obligation to notify us of a breach of the maximum extension period and/or your obligation to transfer collection cases with an additional 30 days. Currently you need to notify us of a breach of the maximum extension period or to transfer your collection case within 30 days after the expiry of the maximum extension period. This period is now extended to 60 days.

2) Secondly, you are allowed WITHOUT our approval to agree with your customer on a later payment for a receivable, even after the expiry of the maximum extension period, as long as these amended payment terms remains within the above mentioned 60 days after the expiry of the maximum extension period.

Please be aware that despite both changes the original due of payment shall remain the date relevant for the application of all other terms and conditions of the policy, such as in particular the Maximum Extension Period, Automatic Stoppage of Cover or Date of Loss. All other terms and conditions of the policy remain unchanged.

Both amendments become effective immediately and until further notice will remain in place for receivables where the expiry of the maximum extension period is reached before September 1 2020.

We trust these policy adjustments are in your best interest and will support you in your efforts to manage the impact of the Covid-19 Corona epidemic on your business and your commercial relationship with your buyers.

In case of questions please contact your local Account Manager or infolithuania@atradius.com

Yours sincerely,

REQUEST TO INSURERS: URGENT actions regarding COVID-19 pandemic and quarantine in Lithuania

Dear PARTNERS

In a situation where the COVID-19 pandemic has led to quarantine being introduced across the country by Lithuanian Government decision and the activities of some businesses are suspended or significantly restricted, there is a constant discussions among our Customers and we receive many inquiries about possibilities to extend the credit terms for their buyers.

In response to the situation and in order to avoid conflict situations, chaos and mistakes, and to protect Insurance Companies from additional traffic of enquiries and messages, we are looking for a strategic solution to help manage this situation.

We ask to extend the maximum credit terms provided in Insurance Contracts by 60 days to all our customers, also extending the deadlines for: notification about overdue, transfer for debt collection and automatic insurance coverage.

We are looking forward to your expeditious solution and even closer cooperation in solving problems at this difficult time for everyone.

If additional information is required to make a decision, please contact us immediately.

LETTER TO CLIENTS:Fulfilment of financial obligations and terms of Credit Insurance during quarantine

Dear customers,

The people and business of Lithuania have been facing an unprecedented situation when the governments of the Republic of Lithuania, as well as of other countries, imposed a state of emergency and quarantine to prevent the spread of the virus. The current situation and uncertainties raise a number of questions for businesses regarding their operations and compliance with their financial obligations.

As a specialised Credit Insurance Broker, and working with over 250 Lithuanian companies, we have decided to provide regular updates on the situation and answers to any concerns that may arise from using the Credit Insurance services.

Following the announcement of quarantine in Lithuania, we immediately asked the Insurers what action they are going to take in Lithuania and other countries.

We will keep all our clients updated as soon as we receive official responses from the Insurance companies.

1. My buyer has stated that he will not honour his financial obligations as a result of force majeure. What should I do?

We would like to draw your attention that the force majeure situation does not exempt companies from the discharge of obligations. In a force majeure situation that can be confirmed by the The Association of Lithuanian Chambers of Commerce, Industry and Crafts for a particular company, companies may agree to postpone the discharge of their obligations, waive sanctions and suspend their futures contracts.

If your buyer informs you that they are not going to fulfil financial obligations under the purchase and sale or the service contract, make sure to notify the Insurance Company immediately.

2. I agree to apply deferred payment or other preferential terms to insured buyer. What next?

If you use the Credit Insurance service, you must notify the Insurance Company of any cases where the new deferred payment terms will exceed the maximum terms specified in the Insurance contract. Therefore, before making arrangements on longer settlement terms, you must discuss these terms and conditions with the Insurance Company. We are ready to help you.

IMPORTANT! We recommend that you to comply with the debt notification and debt collection notice periods indicated in your credit Insurance contract. In case of non-standard situations, they must be discussed with Insurers in advance. In such cases, always consult your Credit Insurance Broker.

We are ready to help, please contact us immediately if you have any questions!

in The BALTIC we are initiating information service for all customers. In addition to this we are demanding changes from insurance companies in regards to credit insurance contract conditions. Here I will share the text of official letters to clients and insurers:

Thank you Joerg! Looking forward to the Steering Committee’s. Below is the current situation in Romania

In Romania the 3 insures have the following status:

1. EH is waiting for HQ to confirm how they will handle the Force Majeure as they have it in the wording and might use it

2. Coface and Atradius looks to be quite calm and said they will pay any claims without issues although Coface’s wording is quite grey

Razvan

Thank you Joerg! Looking forward to the Steering Committee’s. Below is the current situation in Romania

In Romania the 3 insures have the following status:

1. EH is waiting for HQ to confirm how they will handle the Force Majeure as they have it in the wording and might use it

2. Coface and Atradius looks to be quite calm and said they will pay any claims without issues although Coface’s wording is quite grey

Razvan

The steering committee is currently in close discussions with the major underwriters on the general influence of Covid-19 Coronavirus in respect of all major issues of the policy and general measurements to manage the crisis.

We will keep you all posted here.

Kind regards