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Short-term claims paid by export credit insurers increased to higher-than-expected levels in 2012, according to the Berne Union.

Claims paid by the association’s members in short-term business rose by 58%, from US$1.3bn in 2011 to US$2.1bn in 2012. This is below 2009’s US$2.4bn, but still reflects the continuing volatility in which insurers operate, especially in the eurozone.

Fabrice Morel, Berne Union deputy secretary general, tells GTR: “There was a particular increase in European destinations. Credit insurers had expected it because of the eurozone crisis, but the number of claims turned out to be more than what they expected.”

He adds that not all Berne Union members were impacted in the same way: “While a few insurers suffered more than others most insurers witnessed a moderate increase or even a decrease in claims paid. Those who experienced much higher claims can be found across the whole spectrum of the Berne Union membership: large and small, private market insurers and state-backed export credit agencies (ECAs).”

The highest volumes of short-term claims were found in Italy (US$235mn), the US (US$172mn), the UK (US$134mn), Germany (US$133mn) and Spain (US$114mn) – countries where Berne Union members have the highest exposures. Overall (short, medium and long-term) claims paid by insurers reached US$4.7bn.

The association points out that the short-term loss ratio for insurers, taking into account claims paid in relation to premium income, will be higher in 2012 than in 2011, not only because of higher claims, but also due to strong competition pushing premiums down.

Berne Union members covered US$1.7tn of exports in 2012, up 1.4% from 2011. US$1.5tn of that was in the form of short-term export credit insurance, while medium and long-term cover amounted to US$180bn – a drop of 5.5%.

Claims paid by ECAs under medium to long-term transactions reached US$2.6bn, with Iran, Libya, Korea, Ukraine and Russia at the top of the list.

“It is difficult to draw general conclusions from the list of top claims countries, as the background to the various claims situations is specific and differs significantly from country to country. MLT claims can occur for political reasons, when a situation affects a whole country – this is the case for Iran, where obligors experience difficulties to transfer payments abroad – or for commercial reasons, when a large debtor defaults, and this may impact several insurers at the same time.

“Given the political and economic uncertainties in the global environment, coupled with an enormous demand from emerging markets for capital goods fuelled by projects in the infrastructure, energy, and natural resources sectors, the support of ECAs appears to be more than ever crucial for helping banks and exporters to trade internationally,” adds Morel.