Fitch Says Gov't Schemes Helping Virus-Hit Credit Insurers

Law360, London (August 10, 2020, 3:14 PM BST) -- State-backed programs have helped stem pandemic-linked losses for insurers who provide trade credit cover, an insurance policy which is expected to increase in demand, according to Fitch research.

The ratings agency noted Friday that governments have quickly recognized the importance for companies of trade credit insurance, which covers companies when their customers fail to pay up. Many businesses rely on such company-to-company credit as their main source of funding.

The state support schemes include so-called proportional reinsurance treaties, such as in Germany, where the government takes 65% of the premium, and also covers 90% of claims.

There are also instances where...

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