Trade credit insurers pause cover for Russian and Ukrainian risks

Trade credit insurers are stepping away from risks in Ukraine and Russia, according to a Reuters report.

Citing industry sources, Reuters said exporters will find it harder to get cover for trade credit risks to Ukraine and Russia because of increased exposure to non-payment, as well as the impact of sanctions and the potential for reputational damage.

Nick Robson, global leader for credit specialties at Marsh, told the news agency that trade credit insurers have “paused” underwriting new Ukraine and Russia risks during the past week. He said this will be felt by exporters of food, materials and electronics to the two countries, as well as suppliers to their agricultural and energy sectors.

Euler Hermes told Reuters it was adjusting its underwriting strategy, given the uncertainty in the region.

Underwriters will be careful to conduct due diligence on new risks to ensure they comply with fresh sanction measures against Russia and Russian entities, while also being alert to the increased risk of default, given the complications of moving money around during the conflict.

Bernie de Haldevang, head of credit, political risk and crisis management at Canopius Group, told Reuters some trade credit insurers will also consider the impact of continuing cover for Russian risks on their ESG responsibilities, as well as fundamental changes to risk factors.