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Exporter calls for plug to credit insurance gap

Exporter calls for plug to credit insurance gap article image

The current global economic downturn has seen the importance of trade credit insurance rise, but there aren't enough providers to provide export security, says marine exporter VEEM. VEEM have expressly called for government corporation EFIC (the Export Finance and Insurance Corporation) to fill the gap in the market. EFIC moved out of short term credit insurance some years ago but due to a shortage in commercial coverage, VEEM has publicly called for EFIC's return. "The insurance sector has reacted to the global financial crisis by cancelling nearly all of our debtor insurance for our export clients. The government needs to step back in to correct this market failure to enable Australian exporters to compete internationally," said Brad Miocevich, VEEM’s director of Marine Propulsion. Miocevich says the risks of trading globally without insurance are too precarious and could mean losing thousands of dollars if one or more of their customers collapse. VEEM's situation reflects that of many other small and medium exporters, he said: "The credit insurance issue is an undesirable consequence of the GFC and a real threat to the survival of VEEM and that of many others if not rectified in a timely manner."

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