2009
Urgent action on State guarantee credit insurance scheme essential to prevent further export job losses
The Irish Exporters Association (IEA) today 13th July called for a rapid conclusion to the Government's plans to offer a state guarantee scheme to underpin the vital export credit insurance used by many exporters for the cash flow of their supply chain.
John Whelan, CEO of the IEA, stated:
"Hundreds of businesses have been affected by the gradual withdrawal of credit insurers from the high risk export end of the market and increasing costs of insurance for all sectors, as underwriters try to recoup insolvency losses."
He went on to say:
"Brokers are reporting frighteningly long delays to get cover agreed and near doubling of premiums over the past 6 months for clients in high risk sectors."
The IEA have been lobbying since December 2008 for the Government to step in and support export businesses who have seen credit insurance cover reduced or withdrawn by sector underwriters.
Assurances have been given that the Government will devise a state guarantee scheme if an affordable mechanism can be developed. However, the process is proving very protracted. Meanwhile, Finland is the latest member of the EU to offer it's exporters a State supported scheme, which was approved by the E.C. on 22nd June 09 .(See attachment for details).
The IEA Chief Executive commented on this prolonged process:
"Insurance underwriters are facing a severe crisis as company insolvencies continue to grow. Hence, they are continuing to aggressively reduce cover and increase premiums. Furthermore, there is little alternative to credit insurance today, as banks have tightened the conditions to provide credits or guarantees to their clients.
The bottom line is that for many exporters, cash flow for supply chain needs has reached crisis point and that jobs are increasingly at risk."
The IEA have assessed that 7,000 jobs have been lost in export industry due to insurance related aspects of the credit crisis and that there are a further 12,000 jobs at risk if the State Guarantee Scheme is not implemented urgently.
End.
For more information, please contact:
John Whelan
CEO
Irish Exporters Association
Ph: 01-661-2182
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