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What Is Public Export Credit Insurance?

Public export credit insurance protects exporters against bad debt losses as a result of political and economic risks associated with export transactions.

In Germany, Euler Hermes Kreditversicherungs-AG and PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungs- gesellschaft (PwC AG) have been appointed to manage and handle public export credit guarantees. They have been mandated to act on behalf and for account of the Federal Republic of Germany. Since Euler Hermes Kreditversicherungs-AG is the leading partner in this consortium, the public export credit insurance policies are often also referred to as "Hermes Cover".

The main goal of export credit guarantees is to promote foreign trade. Decisions regarding the coverage policy and the underwriting of export credit guarantees are made by the Federal Government's Interministerial Committee.

Since export transactions with long term financing typically require credit insurance coverage, especially when transacting with emerging markets, all Western industrial nations, as well as some developing countries, have public export credit guarantees in place in order to support their country's exporters.

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