Euler Hermes targets growing leasing industry in the Nordics

Expansion of the business-to-business leasing industry in the Nordics suggests it is becoming more common for businesses to lease rather than purchase equipment, potentially increasing the risk of late payment of lease instalments, according to Euler Hermes, the world’s leading trade credit insurance company.

Euler Hermes is now launching the first insurance policy, “Cover Lease”, in the Nordics to support the business-to-business leasing industry in managing the risks associated with non-payment of lease repayments. This transfer of risk means that companies taking out the insurance will continue to receive regular payments even if their leasing partner has failed or is unable to pay future installments.

“We recognize that hard-pressed entrepreneurs need to focus on what matters: innovation, finding new markets and making a profit by taking and managing calculated risks. As risk experts, it is our job to help them achieve those goals. In response to demand from leasing companies, financial organizations and brokers to protect leasing payments, we are putting our risk expertise and balance sheet at their service,” says Dominique Spiranski, CEO Euler Hermes Nordic Region. 

“According to some of the leasing companies we talk to, as much as 18% of all industrial equipment is leased today and, in the future, more assets will be leased rather than owned. We can help clients assess the financial capability of buyers, new markets and sectors as these new markets develop.”

Demand from clients
Trade credit insurance helps businesses trade and grow safely by covering the risk of late or non-payment of invoices when they supply goods or services to clients in return for payment at a later date. These payments due are frequently a business’ major asset, so a late or non-payment could put a company at serious financial risk and create problems for all the businesses throughout an entire supply chain.

With the growth in leasing in the Nordics, Euler Hermes has received interest from various businesses in taking out insurance to protect leasing contracts. Typically, large leasing companies, banks and financial institutions leasing high-value machinery for the construction, agricultural and equipment industries are showing increased interest.

Cover Lease will be offered in all Nordic countries from mid-May 2017.