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Daily Insurance Industry News
Thursday 18th of January 2018
November 28, 2008

French state offers credit insurance to SMEs

by David Masters

Story link: French state offers credit insurance to SMEs

The French government has unveiled plans to offer credit insurance to small and medium sized businesses (SMEs) in the country.

As global markets enter recession, insurers are becoming increasingly wary of offering credit insurance, which covers companies against non-paying customers or if they enter administration.

A number of European insurers have started pulling cover from companies, increasing the risk of default.

Under the new plan, proposed this week by French Economy Minister Christine Lagarde, credit insurance firms only willing to take on half a company’s risk could call in state owned insurer Caisse Centrale de Reassurance to pick up the other half.

Furthermore, if a company is refused a renewal on its credit insurance, it will be able to request cover from Caisse Centrale de Reassurance.

The French government has not set aside a specific amount of funds to pay for this initiative.

Foreign competitors are expected to protest the intervention by the French government, which will be perceived as giving France-based companies an unfair advantage.

CBI, which represents the interests of SMEs in the UK, is calling on the British government to follow France’s lead.

 

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