Export credit market shows strong growth: Berne Union

Berne Union, the global association for the export credit and investment insurance industry, has reported that its market showed “strong growth” across business lines in 2022 and a fall in claims paid overall.

Looking at the data, analysts concluded that export credit remains “well positioned to adapt and innovate” as the industry re-adjusts in the wake of the pandemic and war in Ukraine.

“Our industry has demonstrated great resilience and adaptability throughout the pandemic and now, as we emerge from this, we must continue to innovate, in order to support exporters in a new environment for risk, which will present our industry with both challenges and opportunities,” commented Berne Union President, Maëlia Dufour.

Highlights from the year’s data show that the export credit industry supported $2.83 trillion of cross-border trade and investment with an additional $68.6bn in non-cross-border support for exporters.

Following subdued activity in the wake of the pandemic, MLT business also returned to strength, reaching over $130 bn for the year, just 5.9% below 2019 levels.

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Berne Union notes that growth has been supported by the return of significant transactions in the transportation sector as well as a large expansion of manufacturing sector project.

Renewable energy transactions also continue to increase and are close to doubling 2019 levels, while commitments for natural resources continue to decline now at just 33% of their 2019 levels.

Growth in new business was seen especially in the Europe, East Asia Pacific and North America which together accounted for 63% of total new business.

For ST business, all sectors saw an increase in activity with a notable jump in transactions for energy commodities as energy markets reeled in the fallout of the 2021-2022 global energy crises. Here, unlike with MLT, growth was driven by an increase in business to the MENA region as trade shifted to shorter-term products for this region.

Additionally, Berne Union reports that total claims paid fell from $9 billion to $7.6 billion over 2022, following a notable drop in MLT transportation claims which had spiked in the first stages of the pandemic.

Despite the relatively benign claims in 2022, the expectation among members is that these will increase through 2023, as insolvencies normalise amidst increasing costs and growing political risks.

“Nonetheless, the industry remains well-provisioned with maintained risk appetite,” Berne Union concluded. “Overall, 2022 was a strong year for recoveries, demonstrating the industry’s adaptability and resilience over the period as Berne Union members continue to support the effective functioning of global trade.”

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