Policy Beyond Borders: full risk insurance cover on 160 export markets
KUKE is responding to the pandemic-related economic crisis with the Policy Beyond Borders – a new insurance scheme backed by the State Treasury, encompassing exports to 160 countries and also covering political and force majeure risks apart from commercial risks.
The pandemic, causing a serious economic crisis, has significantly restricted trade between countries, thereby impeding the continuation of foreign expansion for Polish exporters. Additional risks have appeared, like the emergence of coronavirus-related restrictions in the counterparty’s country that may, in turn, lead to defaults on payments for received goods. This is why KUKE is offering a new solution that will allow sales to 160 countries, including numerous markets that remain uninsured by other insurance societies and corporations, to be effectively secured. Among the countries that we cover under our insurance are: Russia, Belarus, China, Saudi Arabia, Mexico, Algeria, Nigeria, Vietnam, and many other Asian, African, and Central and South American states.
The greatest advantage of the new instrument is its geographical scope, broad spectrum of insurance that also covers political and force majeure risks, including the pandemic, and free risk assessment and monitoring, inclusive of debt collection. This is further reinforced by a transparent price formula and numerous, previously unavailable functionalities – and everything can be done online.
This is a solution that is ideally suited to these exceptionally uncertain times. The geographical coverage and the option of subsidiaries of Polish business entities registered abroad insuring sales are unparalleled on the market. As of today, support can be extended not just to those who have captured foreign markets with their products in recent years, taken over the competition, or built their companies from scratch. Naturally, as in the case of State Treasury-backed insurance, this instrument has the broadest coverage on the market, encompassing trade, political, force majeure, and default payment risks. It is also exempt from the requirement of the domestic origin of sold goods that has been applied up until now, Janusz Władyczak, CEO of KUKE, explains.
Risk assessment and debt recovery operations play a considerable role in sales to third countries. Many entrepreneurs are grappling with problems relating to the recovery of receivables within the country itself, without mentioning remote ‘exotic’ markets. KUKE, however, first and foremost provides free risk assessment followed by effective monitoring and, consequently, free and effective debt collection thanks to its extensive and lengthy experience and collaboration with international companies dealing with such matters. Furthermore, the exporter pays only for the sales that have actually been completed and the size of the granted limit has no bearing. The premium is charged monthly, based on the value of the reported turnover, and only a minimum premium of a mere PLN 30 is charged (up to the granted limit of PLN 500,000) in the absence of sales, or PLN 120 (over PLN 500,000). The exporter’s deductible has also been set at a low level of 5 percent.
Fully aware of just how demanding the conditions on the market are, we have endeavoured to make this instrument as flexible as possible so that every company – irrespective of the market sector, size or country of the importer – can select the most optimal insurance parameters. Thus, we have also provided additional solutions, including the option of insuring the production risk, in other words, the reimbursement of the costs of order execution if a contract was terminated by the ordering party, or the option of purchasing an additional credit limit. What’s more, there is also a possibility of insuring a single counterparty, which most insurance firms are often reluctant to provide. It is also worth bearing in mind that the insurance cover obtained translates into greater creditworthiness for banks for instance, which translates into better funding terms of own export operations as well as the possibility of obtaining financing for invoices in the form of non-recourse factoring. The Policy Beyond Borders is KUKE’s response not only to the present market turmoil related to the pandemic but also to the elevated uncertainty in international trade over the past few years. Exporters selling in riskier markets who have benefited from KUKE’s Policy for the East in the past are now getting new insurance cover complemented by attractive solutions, Janusz Władyczak emphasises.
And, very importantly, the whole process of policy agreement conclusion takes place online, using an electronic signature, which can then also be managed online via the Customer Portal, giving fingertip access to all your documentation and elect