Export Credit Insurance

Question 1

What is Export credit insurance?

Answer 1

Export credit insurance protects a seller from the risk of non-payment by a foreign buyer.

• insurance covers commercial risks

Question 2

What commercial risks are covered with export credit insurance?

Answer 2

buyer insolvency, bankruptcy, or default

Question 3

political risks which export credit insurance covers

Answer 3

war, terrorism, riots, revolution, currency inconvertibility, expropriation and changes in import or export regulations.

Question 4

What are the two main providers of export credit risk

Answer 4

Private Insurance companies
Government agencies

Question 5

ECAs targeted at non-marketable risks why?

Answer 5

ECAs generally do not cover marketable risks, which are risks that can be managed through normal commercial practices, such as credit checks or insurance policies.

• risk is easily managed by private sector entities such as commercial banks or insurance companies

Question 6

What is the aim of ECAs

Answer 6

the aim is to support exporters and lenders by providing a form of support that is not available from private sector sources