State will reflect on topping up coverage, for a fee, if private credit insurers cut the proportion of default risk to less than 50%
The German government has approved a plan to provide guarantees to companies, in order to facilitate them to get credit insurance – reported in Forbes.
A government body responsible for decision-making on state aid, had agreed on the plan, which could involve guarantees worth a ‘high single-digit billion euro sum’.
As per the plan, the state will reflect on topping up coverage, for a fee, if private credit insurers cut the proportion of default risk they cover to significantly less than 50%.
Funding for the plan will come from a E115 billion government fund set up to help struggling firms.
Allianz (AZ – news – people)’s Euler Hermes, Atradius and Coface are credit insurance companies in Germany. Together, they make up around 90% of the market and insure 40,000 companies.