Writing for Trade & Export Finance’s Export & Agency Finance Special Report 2014, Charles Berry, Chairman, BPL Global, discusses the changing state of the market for medium and long term (MLT) export credit insurance. Once the preserve of the government export credit agencies (ECAs), the MLT is now a mixed market of ECAs and private insurers, often competing for the same business.
In the article, Berry outlines his vision for MLT cover: a market where the ECAs continue to play a leadership role, particularly for those long term risks for which a proper market has not yet emerged; a market where the ECAs continue to provide capacity and stability, but not price leadership, in the many areas of “non-marketable risk” for which there is now a developed market; and a market where exporters and bankers automatically explore both ECA and private market alternatives, aware that the best answer may be with the private insurers. Berry concludes that if the mixed market is to develop like it should – delivering benefits to clients and supporting global trade and investment – it is essential that it is underpinned by the competitive dynamic of the subscription market.
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