A parliamentary report presented Wednesday recommends better regulating credit insurance while strengthening competition, in order to improve coverage for businesses.
Credit insurance outstandings amounted to 310 billion euros at the end of 2019, i.e. slightly less than half of inter-company credit, which reached 652 billion, recalls the information report by deputies Dominique David (LREM), Patricia Lemoine (Agir ) and Christophe Naegelen (UDI).
Credit insurance, which covers companies against the risk of non-payment by their customers, plays a fundamental role in times of crisis to avoid the risk of a domino effect emptying company cash flow one after the other.
Faced with the Covid-19 crisis, the public supplementary insurance or reinsurance schemes CAP, CAP+, CAP Relais or CAP Francexport have made an essential contribution to maintaining or restoring confidence between economic players, according to the report.
But some policyholders suffered a scissor effect during the health crisis with a reduction in the guaranteed amounts and a simultaneous increase in premiums, Ms. David lamented before the Finance Committee of the National Assembly.
She denounced a disengagement by credit insurers which continued until the end of spring 2020 despite measures to support government activity.
It therefore seems to me necessary to better regulate the possibilities of termination and reduction of guarantees, underlined the deputy.
The report also seeks to prevent credit insurers from imposing exclusivity clauses that prohibit companies from changing insurers in the event of termination or from taking out additional insurance.
The three deputies also ask for more transparency on the offer and to engage in a reflection on the possibility of creating a public offer of credit insurance which could be carried by (the public bank) Bpifrance.
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Finally, they note that the French market is highly concentrated, with Euler Hermes holding 67% of the domestic market and Coface 55% of the export market, the third player being Atradius.
The report explains this situation of oligopoly by the need to set up databases and information networks, as well as know-how in terms of risk analysis, which represents a significant entry cost which hinders the arrival of new players.
A new credit insurer, Cartan Trade, launched at the end of January on this very closed market, with the support of Bpifrance and the reinsurer Scor.
Finally, the rapporteurs want to clarify the conditions for intervention by the State as insurer of last resort vis–vis credit insurers who are themselves poorly capitalized, according to Dominique David.