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With Switzerland being one of the most important global commodity trading hubs, commodity traders are major users of Trade Credit Insurance on the Swiss market. Consequently, metals, energy and chemicals traders constitute a large part of ICBA Switzerland client portfolios. The team have reported that with the global pandemic forcing an economic downturn, this was the first sector to be affected by credit limit cuts and other forms of decrease in an insurer’s risk appetite.

A spokesperson from ICBA Switzerland said: “Our awareness of this and our experience gained during the 2014-2015 commodities’ market fall has helped ensure clients were fully protected. All necessary clauses to smoothen a potential harsh impact were already included in their insurance policies before the start of the COVID-19 crisis (for example a Grace Period clause). This has enabled clients to face the new circumstances well prepared and to avoid severe shocks related to their credit insurance cover. This is what we have always done. So, we continue supporting clients on a regular basis, always looking for solutions on how we can minimize the negative impact of today’s tougher market on them.”

The team also reports that with insurers currently taking a more restrictive position with regards to some industries, they are engaging in challenging discussions with them on credit limits and allocation of scarce risk capacity.