Dutch credit insurer Atradius NV, one of the three largest credit insurers worldwide, said Friday it is assessing the credit default risk of every Greek company and withdrawing cover or cutting limits for those that are highly dependent on imports or business with the public sector.
The announcement echoes statements by peers Euler Hermes SA and Coface in recent days amid mounting uncertainty over whether Greece will remain in the euro. New national elections in Greece scheduled for June 17 could determine if the debt-stricken country will continue to fulfill obligations agreed under a tough international austerity package.
Credit export insurance ensures that exporters are paid if their clients default. The loss of such cover is likely to have a major impact on the willingness of companies to trade with the country involved.
Atradius said it won't provide trade credit insurance for new exports to Greece but will honor existing contracts selectively, in line with similar statements by Coface and Euler Hermes.
In addition, "for domestic trade within Greece we are keeping significant cover in place based on our prudent underwriting over the last couple of months," Atradius said.
"We're closely monitoring developments in Greece and assessing the default risk of every Greek company, case by case," Atradius said.
Euler Hermes, a unit of Germany's Allianz SE, said Wednesday its management board decided late Tuesday that it won't provide insurance for new exports to Greece "due to the recent economic developments and political uncertainties." The suspension will remain until further notice. A company spokeswoman said it will continue to insure exports currently en route to Greece and domestic trade within Greece, fulfilling existing contracts.
Coface, the credit insurance unit of French investment bank Natixis, also said Wednesday it won't write new insurance contracts for exporters shipping to Greece after finding it harder to recover payments from Greek importers.
The company started gradually reducing its exposure to Greece last autumn when it observed "significant payment incidents in Greece, in addition to a worrying macroeconomic outlook," said a Coface spokesman.
"We informed our customers that Greece was facing insurmountable difficulties that will impact importing Greek companies as well as those focused on their domestic market because of the stagnation of demand hit by salary cuts," Coface said.
Euler Hermes said that although its base scenario assumes Greece will remain in the euro, it had gradually reduced trade insurance for exporters to Greece over the past two years.