• Together with the government, the EKA and other Danish credit insurance companies, Euler Hermes supports the government guarantee scheme of DKK 30 billion
• Euler Hermes highlights increased risk of insolvencies and claims, predicts the European economy to fall into the sharpest recession since WW II
  

COPENHAGEN MAY 28, 2020 - The world's leading credit insurance company, Euler Hermes, welcomes the support provided by the Danish government and state export credit agency to support trade insurance transactions when the European economy risks its sharpest recession since WW II.

The company expects European GDP growth to contract very strongly in the first half of 2020 and forecasts that despite unprecedented support from central banks global insolvencies are set to increase by +20% in 2020, with a +19% surge in Europe. As a consequence of this downturn it anticipates claims for late payments or insolvencies from Danish companies could surge by more than 80% from July this year.

"More and more companies - including those in good financial shape before the crisis - face cash flow problems due to unpaid invoices from their customers. The protection mechanism put in place enables us to continue to cover certain risks and to protect our customers," explains Michael Lercke Pedersen, CEO of Euler Hermes Denmark.

Together with the government and other Danish credit insurance companies, Euler Hermes has entered into an agreement on a government guarantee scheme of DKK 30 billion.

With the guarantee scheme in place, Euler Hermes can continue to secure trade between companies and extend support to the Danish economy. Private credit insurance companies, including Euler Hermes, will maintain the insurance capacity in the Danish market during the corona crisis.

"Euler Hermes works closely with the authorities to provide the best possible support and assistance to Danish companies," says Michael Lercke Pedersen.

Credit insurance is an important part of healthy trading

Widespread liquidity problems and threatening bankruptcies creates fear in many companies that their customers will not be able to pay for the goods or services they have ordered. Many Danish companies therefore want to insure against losses.

Danish companies can continue to conduct commercial transactions without the risk of non-payment. Trade credit insurance plays a key role for the economy. Some companies' difficulties could quickly affect suppliers and cause a domino effect throughout the supply chain.

“We are pleased that the support scheme was established in close cooperation between the public authorities and private sector. Thanks to this guarantee, the government supports the Danish companies and ensures that they remain competitive during this difficult period. Euler Hermes plays an important role in making trade between companies possible. The support mechanism aims to protect companies that were in good economic shape before the crisis and to maintain trade,” says Michael Lercke Pedersen.