- German Credit insurers and the German Federal Government reach a joint, far-reaching agreement to protect German companies and their supply chains in times of the Coronavirus
- The protective shield is a joint measure for German companies: It is intended to ensure that previously healthy companies continue to have access to sufficient credit limits despite the considerable increase in default risks
- The German Federal Government will guarantee compensation payments by credit insurers to the value of EUR 30 billion
- Credit insurers make a substantial contribution to the German economy: They will transfer 65% of total premiums to the government this year, cover losses worth up to EUR 500 million and bear the default risks in excess of the government guarantee of EUR 30 billion
- German credit insurers cover default risks worth more than EUR 400 billion, of which Euler Hermes, the market leader, covers close to half
The agreement specifically provides that the German Federal Government will guarantee compensation payments by credit insurers to the value of EUR 30 billion (bn) until the end of the year to cover business transactions of German companies with their domestic and foreign buyers.
The credit insurers also make a substantial own contribution to this protective shield for the German economy: they transfer 65% of the premium income to the German Federal Government and bear losses in the amount of EUR 500 million as well as the default risks exceeding the guarantee of the Federal Government of EUR 30 billion.