KUKE covers exports to EU and OECD countries in times of crisis

Polish exporters can obtain credit insurance from KUKE when selling to the European Union and selected OECD countries, despite the increased risk of buyer's default and reduced cover by other insurers. KUKE GAP EX and KUKE GAP EX+ are instruments created for the time of economic crisis caused by the COVID-19 pandemic and are backed by the State Treasury.

Yoday, Polish exporters face a great challenge - they must effectively manage their receivables and secure the inflow of funds due for the goods or services sold, at a time when the global economy is grinding to a halt as a result of the COVID-19 pandemic. In effect, the stability and solvency of even trusted foreign buyers is in question. An additional difficulty arises when an existing insurer refuses to cover trade receivables in whole or in part. And what is a company to do, if despite the crisis, it has the capacity to boost its exports, but cannot obtain proper insurance cover? Should it expose itself to a risk by sending goods or providing services abroad without insurance?

The answer for every company, regardless of its size or industry in which it operates, is provided by two solutions introduced to KUKE’s offer today: KUKE GAP EX and KUKE GAP EX+. They enable the coverage of exports to the European Union and nine OECD countries, among others: the United Kingdom, USA, Canada and Japan.

"Entrepreneurs must be constantly concerned about liquidity, because in the current conditions, even a small dip in liquidity poses a threat of quick bankruptcy because of the lack of funding. That is why it is so important to safeguard payments for every delivery made. Taking into account the fact that most sales to the developed countries come with a deferred payment term, it is necessary to insure the collection of these receivables. And this regardless of whether the cooperation with the foreign buyer has been going on for a long time or has just been established. Today, the situation is so uncertain that the financial condition of the buyer may deteriorate in the blink of an eye. Unfortunately, it may also turn out that the insurance company, whose services have been used by the exporter so far, will consider the buyer too risky and cancel or significantly reduce the credit limit. Such situations, especially in times of crisis, are typical because insurers are also more cautious about individual companies and industries. In this situation, KUKE comes to the aid by offering two insurance facilities backed by the State Treasury covering 35 countries, which account for almost 90% of Polish exports. - says Janusz Władyczak, CEO of KUKE.

KUKE GAP EX is an insurance facility aimed at companies with credit insurance that want to increase their export revenues. In turn, KUKE GAP EX+ can be used by companies whose existing credit limits have been cancelled or have been refused cover for new buyers. The insurance covers receivables from buyers based in all EU Member States (except Poland) as well as Australia, Iceland, Japan, Canada, Norway, New Zealand, the United States, Switzerland and the United Kingdom. KUKE GAP EX+ provides the widest range of cover currently available on the Polish market: commercial risk, political risk, force majeure, including the risk of a pandemic, and the risk of default by a public buyer. Both instruments will be available from KUKE at least until the end of this year.

"It's a crisis-oriented solution with a State Treasury guarantee. Previously, state support was banned in trade with EU and OECD countries because insurance was available on market terms. However, in the face of such a deep recession and with the fear that private insurers will scale down the cover, the European Commission has allowed this rule to be suspended until the end of this year. We encourage Polish exporters to take advantage of KUKE's new export support schemes and safeguard their transactions. The insurance policy can also be used to secure factoring or a working capital loan, significantly improving liquidity. Moreover, by upholding deferred payment terms for buyers at the peak of the crisis will almost certainly benefit the exporters business relations with its buyers, allowing them to further grow their business in more stable times" - emphasises Janusz Władyczak.

KUKE does not require cyclical turnover reports and other formalities have been kept to a minimum. The agreement will be concluded and managed online. The assessment of buyer risk during the performance of the sales agreement is free of charge. For the sake of full transparency and convenience, the premium is calculated monthly based on the amount of the credit limit granted, and for KUKE GAP EX it is 2% per annum, and for KUKE GAP EX+ it is 4%.

The value of KUKE GAP EX credit limit for a buyer under one insurance policy may not exceed the limit granted by the primary insurer, but not more than PLN 5 million. In KUKE GAP EX+ the maximum limit is PLN 500 000.

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