We offer comprehensive credit insurance coverage, from credit insurance for foreign markets prospecting, through export credit insurance and insurance of bank guarantees issued in relation to acquisition or performance of export contracts, to pre-export financing insurance or manufacturing risks insurance. Our portfolio of insurance products includes everything that exporters or investors may need. The conditions under which these products are offered are quite comparable to those applicable to exporters in other developed European countries.
The insurance products can be classified into 3 groups:
The demand for export buyer credit insurance grows year to year. This is when the bank pays the Czech exporter on behalf of a foreign importer and the owed amount is then repaid by the foreign importer on a regular schedule stipulated in the credit contract. In some cases the recipient of the credit and afterwards the debtor is the bank of the foreign importer. The maturity of credit normally exceeds 2 years and therefore the terms and conditions of insurance are governed by the OECD Consensus; these rules require a down-payment by the foreign importer of at least 15%. In addition, we reserve the right to request from an exporter submission of an environmental impact assessment of export on the importer’s country. In this case the insured is the bank that is covered against the risk of the non-repayment of the export buyer’s credit on the stipulated schedule.
In addition the portfolio includes insurance of short term and medium term and long term export supplier credit. This is not a bank loan, but a deferred payment provided by Czech exporters to foreign buyers. In this case we provide cover if the importer does not duly pay on time. An alternative to this type of insurance is the insurance of short term, medium term and long term export supplier credit financed by a bank, allowing the bank to buy the debt of the foreign importer from the exporter. For exporters this means payment much sooner than the foreign importer repays the debt.
This group includes two types of insurance. It is the insurance of credit for pre-export financing, when the loan provided by the bank can be used to finance production for export and, in case of positive experience with the respective exporter, also for the financing of an investments necessary for export production. The pre-export credit may also be used for the financing of commercial utilization of results of science and research for export purposes. The insured is the bank and insurance may be arranged only in connection with insurance of certain types of export contracts.
This group of insurance also includes the insurance of credit for the financing of investments of Czech legal entities in foreign countries, a bank loan for acquisition of fixed tangible, intangible or financial assets in a foreign company controlled by a Czech investor or for acquisition of a foreign company by a Czech investor, or alternatively for operational financing of a foreign company. Only such credit may be insured where the time from the first use of the credit to the final repayment exceeds 3 years. Partial financing of the investment from the investor’s own funds is another precondition for the insurance. The insurance provides coverage for the bank against the risk of non-repayment of the credit provided to the investor or to the investor’s foreign subsidiary.
These are complementary products, among which the most used is the insurance of bank guarantees issued in relation to export contracts. A bank guarantee is a bank’s commitment to satisfy the Beneficiary up to a certain amount of money in accordance with the contents, terms and conditions of the guarantee. A bank guarantee is issued by the bank on the basis of a request from an exporter in connection with the terms and conditions of a concluded export contract or a tender. Banks mostly issue guarantees for a bid of a Czech exporter (Bid Bond), for the return of an advance payment from a foreign importer (Advance Payment Bond) and for due performance of an export contract (Performance Bond). The insurance provides to coverage against the risk of ineligible and optionally also eligible calling of the guarantee by the Beneficiary in favour of whom the guarantee has been issued.
Among other types of insurance is insurance of investments in a foreign country, i.e. insurance of any assets remitted abroad in connection with economic activity of Czech investors. The insurance protects the investor against the risk of transfer of yield upon investment, expropriation or politically motivated violent damage.
The insurance of production risks protects the exporter against losses resulting from cancellation or suspension of an export contract by a foreign buyer in the course of production.
The insurance of foreign markets prospecting protects the exporter against losses resulting from a total or partial failure of prospecting, regardless of whether it used its own funds or credit for prospecting. This type of insurance is designed primarily for small and medium sized enterprises.
In addition we offer the insurance of a confirmed letter of credit, insuring the exporter's bank against the risk of loss of property due to total or partial non-payment under the terms and conditions of the confirmed documentary letter of credit.