Commercial credit insurance, 20% more expensive

The rising cases of firms not paying debts to suppliers or other business partners have rendered commercial credit insurance 20% more expensive, on average, in the pas year, and in the case of some clients prices have even doubled, states Cristina Rusuleanu, general manager of the Romanian subsidiary of Euler Hermes, one of the world's biggest commercial credit insurers. In Romania, only 2-3% of the more than one million firms on the market buy this type of insurance. "Prices have risen by 20% on average, but in the case of policies with very high claims they have climbed even by 50-100%. We also had policies with a claims rate of 500-600%, and hence the situation had to be balanced through price hikes. This year will not be better than 2009, we're grappling with many non-payment cases," Rusuleanu explains. How does this insurance work? Firms effectively insure their turnover. Before the crisis, premiums for this policy amounted to 0.35% of insurable turnover, but now quotes have gone up to 0.4-0.5%.