Insurance policy in foreign currency
SERV can issue insurance policies in euros or other convertible currencies for supply contracts in a foreign currency. If a loss occurs, the indemnification is paid out in the foreign currency. Insurance premiums may be paid in Swiss francs or the foreign currency. A premium surcharge may apply for policies issued in foreign currency. The surcharge is five percent for policies issued in euros and ten percent for all other currencies. SERV currently raises no surcharges for insurances or guarantees in foreign currencies.
Reinsurance is ideal for transactions involving international suppliers or participation. The principal supplier’s export credit insurance (ECA) covers the full project volume. The risks relating to supplies and sub-contracted work can be reinsured by the third country’s ECA vis-à-vis the primary insurer. If a loss occurs, the primary insurer can file a claim with the reinsurer. SERV or the foreign ECAs decide whether to take out reinsurance.
SERV currently has agreements with the following ECAs:
Mixed credits are export credits based on international treaties. One tranche of this credit enjoys preferential government terms. The other tranche is subject to standard market conditions, and is generally insured with SERV.
Local costs can be insured
SERV defines local costs as goods and services supplied from the buying country that are directly associated with the exporter’s export transaction and are part of the receivables owed by the buyer to the exporter. For example, local costs are the costs of constructing a building to hold equipment supplied by the exporter. In the case of export financing with a credit period of two years or more, local costs can be covered up to a maximum of 50 per cent of the value of the export contract value (i.e. the total order value less local costs). The limit is 40 per cent in countries in consensus category I (high-income OECD countries).